Thursday, February 22, 2018

Drug Channels News Roundup, February 2018: Walgreens Boots Alliance + AmerisourceBergen, Copay Coupons, and Amazon

Winter—or at least February—is almost over! Bid farewell to the shortest month of the year with this curated selection of noteworthy news. In this issue:
  • A few thoughts on a Walgreens Boots Alliance-AmerisourceBergen deal
  • Watch a fun panel discussion on copay coupons
  • The latest on Amazon’s ambitions for medical products
Plus, The Onion provides an additional update on Amazon’s healthcare plans.

P.S. For my daily updates on news and neat reports, follow @DrugChannels on Twitter. My recent tweets have covered copay accumulators, Medicare Part D, the 340B program, M&A rumors, healthcare economics, and more.

Walgreens Has Made Takeover Approach to AmerisourceBergen, The Wall Street Journal

The Wall Street Journal broke the news that Walgreens Boots Alliance (WBA) may acquire the 74% of AmerisourceBergen that it doesn’t already own. All hail Stefano Pessina, our global channels overlord!

I detail the two companies’ tangled and complex relationship in Section 7.3.2. of our 2017–18 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

As a general rule, I publish detailed analyses only after an official transaction announcement. That said, the strategic rationale for this transaction is not clear to me.

Perhaps it’s just the first stage in a broader restructuring of the Pessina empire. If the WBA-ABC deal is completed, then the company could then spin out two new public companies: (1) a global pharmacy business with Walgreens, Boots, and other internal assets, and (2) a global wholesale business with AmerisourceBergen and Alliance Unichem. Hmmm.

In the meantime, perhaps you should read my Drug Channels article from March 2013, in which I wrote: "I expect Walgreens/Alliance Boots to purchase ABC outright within 10 years."

If the deal happens, it will be my second-best prediction. In a November 21, 2017, post, I wrote about "the Eagles' inevitable 2018 Super Bowl victory." Just sayin’.

Patient cost sharing for prescription drugs: Policy Issues, The USC-Brookings Schaeffer Initiative for Health Policy

Last week, I participated in a lively and contentious panel at the Brooking Institution. It was moderated by Margot Sanger-Katz, a New York Times healthcare reporter. The panelists were:
  • Adam J. Fein, your friendly neighborhood blogger
  • Elizabeth Fowler, Vice President, Global Health Policy, Johnson & Johnson
  • Geoffrey Joyce, Director of Health Policy, Leonard D. Schaeffer Center for Health Policy & Economics, University of Southern California
  • Steve Miller, Chief Medical Officer, Express Scripts
  • Fiona Scott Morton, Theodore Nierenberg Professor of Economics, Yale School of Management
It’s worth watching if you have time. I first pop up about 21 minutes into the video, and then am engaged throughout the conversation.

I also recommend this excellent and informative research paper: A Perspective On Prescription Drug Copayment Coupons. It was co-authored by Dr. Joyce.

Amazon’s Latest Ambition: To Be a Major Hospital Supplier, The Wall Street Journal

Here’s a must-read piece about Amazon’s attempt to penetrate the med-surg distribution channel. According to the article:
“ Inc. is pushing to turn its nascent medical-products business into a major supplier to U.S. hospitals and outpatient clinics that could compete with distributors of items ranging from gauze to hip implants.”
Consider this story to be the latest update on Amazon’s non-entry into the prescription drug channel, as highlighted in our November news roundup. For details on Amazon’s sales of over-the-counter (OTC) drugs, see Amazon has quietly launched an exclusive line of over-the-counter health products from CNBC.

Amazon Warehouses Stocked With 20,000 Doctors In Preparation For Healthcare Launch, The Onion

Another scoop from my favorite news source!

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