Drug Channels delivers timely analysis and provocative opinions from Adam J. Fein, Ph.D., the country's foremost expert on pharmaceutical economics and the drug distribution system. Drug Channels reaches an engaged, loyal and growing audience of more than 30,000 subscribers. Learn more...

Friday, September 18, 2020

Three Ways to Boost Patient Access to Orphan Drugs—With an Independent Specialty Pharmacy

Today’s guest post comes from Ela Lourido, Vice President of Business Development at Biologics by Mckesson.

Ela discusses the important role independent specialty pharmacies play in educating payers, supporting patients, and ultimately getting potentially life-saving therapies into the hands of patients.

Click here to learn more about Biologics by McKesson's patient access services for biopharmaceutical manufacturing companies.

Read on for Ela’s insights.

Tuesday, September 15, 2020

My Wall Street Journal Op-Ed about the 340B Program

Last Friday, The Wall Street Journal published my opinion piece: The Federal Program That Keeps Insulin Prices High. The article text is pasted below for those who don't subscribe.

I summarize issues with the role of contract pharmacies in the 340B Drug Pricing Program. My arguments will be familiar to regular readers of Drug Channels. I wrote this piece for a general business audience, so it's highly readable and omits industry insider terminology. To help you get the most from the article, I have included additional links to source materials in the text.

Note that my commentary focuses primarily on hospitals, which account for the vast majority of 340B program sales. Federal grantees are more likely to pass discounted 340B prices to needy patients. However, grantees should consider my warning from 2014: The good apples—the 340B entities that require additional financial support to support needy patients—should be worried that the bad ones could rot away the program for everyone.

Please share your comments below and I'll respond where appropriate.

Monday, September 14, 2020

New for 2021: The Drug Channels Quarterly Video Webinar Series

We are proud to bring you something new for 2021!

Join Dr. Adam J. Fein, CEO of Drug Channels Institute (DCI), for five live video webinars—one every calendar quarter, starting in the fourth quarter of 2020. These live, interactive events will be broadcast via Zoom from the Drug Channels Video studio in beautiful downtown Philadelphia.

During these quarterly updates, Dr. Fein will address the latest issues confronting the U.S. drug channel. Topics will be determined based on what’s happening—trends, policy changes, executive orders, company announcements, and more. He’ll also share DCI’s latest market data to help you stay on top of new developments. You will be able to use these events as both a capstone of your quarterly learning and a touchpoint for the future.

The 75-minute events are scheduled for 12:00 p.m. to 1:15 p.m. ET on:
  • December 18, 2020 (Drug Channels Outlook: What You Need to Watch in 2021)
  • March 26, 2021 (Drug Channels Update: 2021Q1)
  • June 25, 2021 (Drug Channels Update: 2021Q2)
  • September 24, 2021 (Drug Channels Update: 2021Q3)
  • December 17, 2021 (Drug Channels Outlook: What You Need to Watch in 2022)
PLUS: Dr. Fein will take your questions during each event. We will also offer an opportunity to submit questions in advance of each event.

Read on for full details on pricing, including substantial discounts for multiple sites.

Thursday, September 10, 2020

Why Generic Medicines Are Especially Good for the U.S. Right Now

Today’s guest post comes from George Keefe, Senior Vice President of External Affairs and Public Policy at Teva Pharmaceuticals.

George examines the economic impact of generic pharmaceuticals on the U.S. economy. He argues that the generics industry provides safe, effective, and affordable medicines for many Americans.

To learn more, download the Teva United States Economic Impact Report.

Read on for George’s insights.

Wednesday, September 09, 2020

The State of Specialty Pharmacy 2020: Market Data and Trends (video)

In May, I recorded a brief video webinar for an on-demand business education session at Asembia's 2020 Specialty Pharmacy Summit Virtual Experience.

You can watch the full video below. I review:
  • The role of specialty drugs in the pharmacy industry
  • Our latest data on specialty pharmacy accreditation
  • Commentary on PBM’s role in the specialty industry
The data are drawn from our 2020 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

Friday, September 04, 2020

Why Do CVS And Express Scripts Rely on Secretive Private Companies to Run Their Copay Maximizer Programs? (rerun)

This week, I’m rerunning some popular posts while I work on the forthcoming 2020-21 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Click here to see the original post and comments from June 2020. It was one of my most popular articles in 2020.

One minor update: PrudentRx finally has a website! It's still uninformative and misleading, but I suspect that my original article shamed them into putting up a better placeholder.




In Copay Maximizers Are Displacing Accumulators—But CMS Ignores How Payers Leverage Patient Support, I explained a new Centers for Medicare and Medicaid Services (CMS) final rule regarding health plans’ use of copay accumulator adjustment. I also highlighted why plans have responded to the negative patient impact from accumulators with copay maximizer programs.

However, maximizers are being implemented very differently from accumulators.

The two largest PBMs—CVS Health’s Caremark and Cigna’s Express Scripts—have each partnered with secretive and independent private companies to operate specialty drug maximizer programs for their plan sponsor clients. What’s more, at least one of these private companies earns fees equal to 25% of the manufacturer’s copay support program.

These arrangements are very odd. Why do multi-billion-dollar public companies rely on these private companies to administer their maximizer programs? Why do these small companies deserve such outrageous fees? Why are beneficiaries required to affirmatively sign up with the companies—or face ludicrous costs that far exceed their plan’s out-of-pocket maximums? Does any oversight exist for these arrangements?

Here’s what I managed to uncover about these businesses. See what you think.

Thursday, September 03, 2020

Copay Maximizers Are Displacing Accumulators—But CMS Ignores How Payers Leverage Patient Support (rerun)

This week, I’m rerunning some popular posts while I work on the forthcoming 2020-21 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Click here to see the original post and comments from June 2020.

I'll have an update on accumulators in September.



COVID-19 has not stopped the wheels of policy bureaucracy from grinding. Last week, the Centers for Medicare and Medicaid Services (CMS) released its final Notice of Benefit and Payment Parameters for the 2021 benefit year. You’ll find the document links below.

This final rule permits insurers to exclude the value of a pharmaceutical manufacturer’s copay support program from a patient’s annual deductible and out-of-pocket maximum obligations.

Translation: CMS has confirmed that insurers have the option to use copay accumulator adjustment for their pharmacy benefit programs.

Patients on specialty drugs lose big from accumulators, while plans profit from the lower spending that results. Consequently, copay maximizers have emerged as a more patient-friendly alternative to accumulators. Below, I remind you of the math behind these alternatives.

Plan sponsors are publicly denouncing copay support programs—while they’re privately embracing them. CMS’s final rule ignores the troubling reality behind maximizers and accumulators: They encourage plans to use pharmacy benefit deductibles as a scheme that allows payers—not patients—to reap the greatest benefits from a manufacturer’s patient support program.

Wednesday, September 02, 2020

Walgreens and CVS Top the 28,000 Pharmacies Profiting from the 340B Program. Will the Unregulated Party End? (rerun)

This week, I’m rerunning some popular posts while I work on the forthcoming 2020-21 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Click here to see the original post and comments from July 2020.

I'm rerunning this post to provide context for manufacturers' recent actions regarding 340B contract pharmacies. The "SUBREGULATORY MISCHIEF" section below explains crucial background.


Yesterday, Eli Lilly announced that its products can be dispensed only at covered entities and their child sites, but not via external pharmacies. However, Lilly will permit its insulin to be dispensed from 340B contract pharmacies—as long as patients receive the discounted 340B prices of $0.03 per 3 mL pen or $0.10 per 10 mL vial. Amazing.


It’s time for our annual look at the 340B Drug Pricing Program’s booming pharmacy component.

Our exclusive analysis of government data finds that 28,000 pharmacy locations—almost half of the U.S. industry—now act as contract pharmacies for the hospitals and other healthcare providers that participate in the 340B program. Over the past 12 months, the number of pharmacies in the program has grown by more than 3,300 locations.

As you will see below, multi-billion-dollar, for-profit, publicly traded pharmacy chains—Walgreens, CVS, Walmart, Rite Aid, Kroger, and Albertsons—continue their unchecked 340B expansion.

Despite this astonishing growth, the contract pharmacy component does not have—and has never had—a regulatory infrastructure. That’s because the subregulatory notice that created contract pharmacies wasn’t subject to any rulemaking procedures. Eli Lilly recently challenged this notice, which forced the government to concede that its own pharmacy guidance is “not legally enforceable.”

As you review our analysis, ponder why manufacturers still comply with HRSA’s non-binding guidance—and why investors remain unconcerned with the risks of public companies’ participation in the out-of-control 340B program.

Tuesday, September 01, 2020

PBMs and Drug Spending in 2019: CVS Health and Express Scripts Outperform Prime Therapeutics (rerun)

This week, I’m rerunning some popular posts while I work on the forthcoming 2020-21 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Click here to see the original post and comments from June 2020.

Since my original article below, MedImpact has released its annual drug trend report. Like Prime, MedImpact also underperformed the larger PBMs. Click here to view the updated chart that I posted on @DrugChannels.




It’s time for our annual Drug Channels examination of PBM drug spending reports. For 2019, we again aim our magnifying glass at the annual trend reports from the largest pharmacy benefit managers (PBMs): CVS Health, Express Scripts, and Prime Therapeutics. (See their report links below.)

Once again, we find that commercial drug spending did not race higher—contrary to what you keep hearing from journalists and politicians. Spending rose by less than 3% in 2019, continuing a multiyear trend of slow growth. At some plan sponsors, total drug spending even declined. For specialty drugs, higher utilization—not drug costs—was again the biggest factor driving specialty spending growth.

Notably, clients of Prime Therapeutics fared worse than those of Express Scripts and CVS Caremark. Below, I explain three factors behind Prime’s underperformance. Its third place finish highlights why the PBM industry continues to consolidate.

Monday, August 31, 2020

How GoodRx Profits from Our Broken Pharmacy Pricing System

On Friday, GoodRx filed its Form S-1 in preparation for going public. Link below.

The company is insanely profitable. Its adjusted net income—earnings before interest, taxes, depreciation, and amortization (EBITDA)—is an astonishing 40%.

Below, I provide my overview of how our crazy drug channel system enables GoodRx’s good fortune. You will admire the GoodRx management team’s business savvy in building a company that lowers out-of-pocket costs for consumers. But you will also wonder whether this business perpetuates a broken pharmacy drug pricing model.

P.S. This article updates and expands on the comments I posted to @DrugChannels on Friday evening.

Friday, August 28, 2020

The ConnectiveRx Non-Commercial Pharmacy: Maximize Your Patient Access Strategy

Today’s guest post comes from Frank Dana, Chief Commercial Officer at ConnectiveRx.

Frank discusses the access challenges that patients face at the point of prescribing. He then describes how ConnectiveRx’s non-commercial pharmacy solution streamlines workflow for healthcare providers and captures useful data for brands.

Click here to download a free information sheet about the ConnectiveRx Careform non-commercial pharmacy.

Read on for Frank’s insights.

Wednesday, August 26, 2020

Five Surprising Facts About COVID-19 Prescription Trends for Retail and Mail Pharmacies

Somehow, we are nearly two-thirds of the way through 2020. It’s time to explore what’s been happening within the U.S. prescription market and its dispensing channels.

Below, I highlight five data-based observations about the prescription trends we’ve seen so far this year. Our findings span the unexpected resilience of retail pharmacies and a troubling drop in new prescription activity.

I also offer a fresh perspective on recent mail controversies and the abundance of nonsensical statistics in recent news stories. Links to sources appear at the bottom of this article.

While reviewing the data below, please recall our Drug Channels philosophy, courtesy of the late senator Daniel Patrick Moynihan: "Everyone is entitled to his own opinion, but not his own facts."