Strategic Questions for 2K10 (Part 2 of 2)

Here is the second of two posts outlining major topics that I'll be watching in 2010, framed as strategic questions with links to relevant background posts. Please feel free to add your own strategic questions in the comments.

Strategic Questions for 2K10 (Part 1 of 2) appeared on Tuesday.

I'll be returning to regularly scheduled blogging tomorrow.

Government Programs Summit

I am pleased to welcome our first sponsor—IIR’s Third Annual Government Programs Summit. This event will be held in Baltimore on February 8-10, 2010.

The event will be moderated by Chris Cobourn, Vice President of Regulatory Compliance at CIS and a friend of Drug Channels. CIS’ Pharma Compliance Blog is included in our blog roll.

Drug Channels readers understand the importance of government programs and pricing issues, so I encourage you to check out this event. Below are some details courtesy of IIR. Click here to see the agenda and list of speakers, which includes many folks from agencies such as the Center for Medicare & Medicaid Services (CMS) and Department of Veterans Affairs.

Strategic Questions for 2K10 (Part 1 of 2)

Happy New Year!

Welcome back to another year of irreverent, humorous, and potentially insightful viewpoints from Adam J. Fein, your friendly neighborhood blogger. My 2010 looks busy already but I plan to continue sharing my $0.02 with you on Drug Channels.

Here is the first of two posts outlining major topics that I'll be watching in 2010, framed as strategic questions with links to relevant background posts. Please add your own strategic questions in the comments.

Part 2 will appear on Thursday.

See you in 2010!

Well, here we are, my 108th and final post for 2009. Thanks to everyone for your readership, comments, friendship, support and/or criticism. I hope you've enjoyed reading Drug Channels this year as much I enjoyed writing it.

Drug Channels will be back on January 4 with my Strategic Questions for 2010 along with our very first sponsor. In the meantime, I have something naughty and something nice to close out 2009.

Naughty and Nice News

Here's my December roundup of noteworthy news from the Drug Channels universe.

Find out who's been naughty and who's been nice at McKesson Corp. (NYSE:MCK). Plus, news about a new FTC commissioner who's not fond of Pharmacy Benefit Managers (PBMs); New York tries to save money with the AWP rollback; and the launch of a new mail-order pharmacy. Ho ho ho!

NCPA Responds to Drug Channels

My little ol’ blog caught the attention of the National Community Pharmacists Association (NCPA).

Yesterday, NCPA posted a response to Shhhh! Owning a Pharmacy is Very Profitable entitled Independent Community Pharmacy Today.

I’m flattered that NCPA has validated Drug Channels as a source of industry information worthy of rebuttal. Muchas gracias.

In keeping with my blogging philosophy (“Everyone is entitled to his own opinion, but not his own facts.”), I want to show you clearly why my computations are not “exaggerated,” as NCPA claims. Please note that NCPA’s response neither disputes my figures nor provides any alternative data. U.S. Census Bureau data on pharmacy margins further supports my conclusions.

I also want to clarify one point about the availability of the Digest’s financial data—although my original critique still holds true.

Finally, I want to remind you that I have no conflicts of interest—although my interest in facts can create conflicts.

Drug Importation: Dead Again

Importation is off the table (again). See Measure to Allow Drug Imports Fails.

The vote was 51-48 in favor (!) of the amendment, but the number fell short of the 60 votes required in the Senate so the amendment was defeated. Click here to see the roll call of votes by Senator.

Shhhh! Owning a Pharmacy is Very Profitable

You may not believe it, but independent pharmacy owners are doing financially quite well, averaging almost $300K in personal income in 2008.

This surprising fact comes from the Executive Summary of the 2009 NCPA Digest Sponsored by Cardinal Health. Click here for the NCPA's public Digest page.

Need further proof that times are good? The NCPA has marked the full financial results as “TOP SECRET.” So much for transparency!

I don’t begrudge the right of business owners to earn a profit. But perhaps pharmacy owners should tone down the woe-is-us rhetoric and stop blaming everyone else—the government, PBMs, drugmakers, third-party insurance, cylons, sunspots, whomever—for (supposedly) “low” profit levels.

CVS Wins a Big One Despite Mudslinging

In the news today: CVS Chosen for $1 Billion Contract to Manage Pharmacy Benefits.

I'm sure the folks in Wooksocket are breathing a sigh of relief ("Whoa.") after November's unexpected contract losses, although this win doesn't "prove" the benefit of a combined PBM-pharmacy chain model. (See CVS Caremark: Pharmacy Gain, PBM Pain.)

Myths and Facts about Drug Prices

The House Energy and Commerce Committee’s Subcommittee on Health held a hearing yesterday titled “Prescription Drug Price Inflation: Are Prices Rising Too Fast?” The hearing was sparked by the AARP’s recent report on prescription drug prices that I wrote about in Drug Prices and Pharmacy Profits.

The testimony revealed a major distortion in the AARP-Schondelmeyer price studies, which increasingly make climate research at the University of East Anglia seem like the pinnacle of accurate and unbiased scientific inquiry.

Importation: Review Your Agreements

Senator Byron Dorgan (D-ND) is trying to staple his infamous importation bill to the 2,000+ pages (and counting!) Senate health care bill and claims that Senate Majority Leader Harry Reid (D-NV) will allow a vote on it (per the Puffington Host).

The odds of commercial drug importation legislation are higher than anytime in recent memory. What would it mean in practice?

• Commercial buyers—drug wholesalers, brick-and-mortar pharmacies, mail-order pharmacies—will be sorely tempted to purchase brand-name drugs from overseas sellers.
  
  
• Pharmaceutical manufacturers will have a hard time structuring commercial agreements to reduce or block importation. Manufacturers will also have little choice about whether to do business with known US importers or non-US exporters.

Anyone getting ready to negotiate a wholesale or pharmacy distribution agreement—buyers and sellers—should be paying attention to the language in the importation amendment.

Genzyme's Troubles Will Help Prescott's Vaxafilth

In this short video clip, Dr. Stephen T. Colbert, D.F.A., discusses how manufacturing problems at Genzyme (NASDAQ:GENZ) will aid the upcoming launch of Prescott Pharmaceuticals' new Vaxafilth product. Isn't it time that filth wallowed in you?

Full disclosure: Prescott is one of my consulting clients. I advised them on the trade strategy for Vaxadrin.