- My $0.02 on Anthem’s Other Motivation for Its Express Scripts Lawsuit
- Trinity Health Fires Wholesaler Cardinal Health and Takes Its Supply Chain In-House
- Express Scripts Provides a Useful Look at the Generic Pipeline in 2016
Anthem and Express Scripts war could change the pharmacy benefits model, Pharmalot/STAT
Anthem’s lawsuit against Express Scripts has generated plenty of schadenfreude throughout the industry. This Pharmalot article analyzes the dispute and provides context for Anthem’s motives. As I describe in Chapter 5 of our 2016 Economic Report on Retail, Mail, and Specialty Pharmacies, Anthem wants to acquire Cigna, which operates its own PBM but has an outsourcing deal with Catamaran.
However, I haven’t seen this explanation for Anthem’s actions anywhere else:
But any shift that lessens reliance on pharmacy benefit managers at a time when there are questions about their role in drug pricing can be a plus for Anthem. How so? The insurer could argue to the Federal Trade Commission that its pending merger with Cigna could increase competition for pharmacy benefits, rather than be viewed only with concern about decreasing competition among health plans.Hospital chain Trinity Health, XPO partner to take supply chain in house, DC Velocity
“Anthem likely wants to bring its PBM function back in-house as part of a combined Anthem-Cigna company,” said Adam Fein of Pembroke Consulting, who tracks drug distribution. “Perhaps Anthem’s dispute with Express Scripts is in part a way to convince the FTC to approve the Anthem-Cigna merger because it would increase competition in the PBM market.”
Here’s an unusual move: Trinity Health, which operates 90 hospitals nationwide and has nearly $16 billion in revenues, will end its distribution relationship with Cardinal Health and instead rely on a third-party logistics company. (CLARIFICATION: Cardinal Health will continue to provide pharmaceutical distribution services to Trinity. See comment below.)
Perhaps I am misinterpreting Trinity’s intentions, but its plan seems like the triumph of hope over experience. Hospitals go through periodic cycles of insourcing, during which they believe that they can eliminate wholesalers' slim margins and operate distribution systems more efficiently and effectively. Alas, supply chain management is not a core competency of hospitals. These experiments usually get reversed after a few years—but not before a hospital spends millions on its effort. Let’s see if Trinity can buck the trend.
2016 Drug Pipeline Full of Blockbuster Potential, Express Scripts Insights
Express Scripts published this useful summary of the 2016 generic pipeline. Here is Express Scripts’ list of 5 major drugs that will lose exclusivity and face generic competition in 2016. In 2015, these five drugs had $14.3 billion in revenues.
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Next week, I'll have some insights about Gleevec's generic competition.
Hope this month’s roundup made you go hog wild. The fun will continue in April!
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