Analysis

This week, I’m rerunning some popular 2015 posts, so I can work on the forthcoming 2015-16 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Click here to see the original post and comments from February 2015. Today's rerun, along with What’s Behind Walmart’s Pharmacy Profit Warning?, will help you get anticipate the 2016 Part D marketplace.

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This past Friday, the Centers for Medicaid & Medicare Services (CMS) released its thoroughly-titled Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter. Most people refer to this 172-page ode to healthcare bureaucracy as the 2016 Call Letter.

CMS’s proposed changes to Part D’s pharmacy networks will not sting as much as they did last year. In the Call Letter, CMS outlines its concerns about preferred cost-sharing pharmacy networks and proposes policing them more closely. Read my analysis below.

If you want to comment, you have every single day until March 6, 2015.

This week, I’m rerunning some popular 2015 posts, so I can work on the forthcoming 2015-16 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Click here to see the original post and comments from May 2015.

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Three of the biggest pharmacy benefit managers (PBMs)—Catamaran, CVS Health, and Express Scripts—have now released their 2014 drug trend reports. (Links below.) That means it’s time for my annual review of what the reports say about drug spending—and which questions remain unanswered.

Drug trend measures the change in a plan sponsor’s total prescription drug expenditures—excluding rebates and (sometimes) administrative fees.

Express Scripts and CVS Health reported comparable drug trend figures, while Catamaran’s were much lower. Oddly, Prime Therapeutics issued a spending report that omitted drug trend figures. When it publishes a more complete analysis, I’ll publish an update.

As I noted last year, the top-line figures don’t tell the full story, due to differences in methodology and data presentation differences. When you read a PBM’s drug trend report, don’t forget Mark Twain’s observation: Confidence is the feeling you have before you fully understand the situation.

This week, I’m rerunning some popular 2015 posts, so I can work on the forthcoming 2015-16 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Click here to see the original post and comments from May 2015. And if you want to beat the crowds, you can register now for the 2016 Armada Specialty Pharmacy Summit.

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Last week, Paula and I had the pleasure of attending the 2015 Armada Specialty Pharmacy Summit, in wonderful Las Vegas.

Armada has cemented its position as the must-attend event for anyone participating in the specialty channel. Kudos to Larry Irene and Robert Irene. They’ve had the vision and wisdom to invest in making the meeting bigger and better every year. The social media buzz also was impressive. Check out the many, many #Armada15 tweets.

Continuing my annual violation of Vegas code, I'll tell you what happened there—what I heard and learned about specialty pharmacy’s future. If you were there, please add your own comments and observations.

NORD 2015 Rare Diseases & Orphan Products Breakthrough Summit
October 21-22, 2015 | Arlington, VA

The ONLY Rare Disease Conference Co-Sponsored by the FDA: www.nordsummit.org

Drug Channels readers will save $200 off the standard registration rate when they use code TCC245.*

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• Integrating the patient voice into R&D
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• Branding & fundraising strategies for rare diseases
• Expediting early diagnosis
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• And more!

This is the largest multi-stakeholder event www.nordsummit.org in rare diseases. You won’t want to miss the chance to hear from an unparalleled speaking faculty, including four featured Keynote Addresses:

• Jono Lancaster, Patient Advocate, Treacher Collins Syndrome
• Janet Woodcock, M.D., Director, Center for Drug Evaluation and Research (CDER), FDA
• Stephen Ostroff, M.D., Acting Commissioner, FDA
• Christopher P. Austin, M.D., Director, National Center for Advancing Translational Sciences (NCATS), NIH

For more information including the speaker list and session line-up, please visit www.nordsummit.org.

Drug Channels readers will save $200 off the standard registration rate when they use code TCC245.*

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Last week, Wal-Mart Stores surprised everyone by highlighting reduced profits from its pharmacy business. In corporate-speak, these were called “headwinds from pharmacy reimbursements” on its quarterly and annual earnings. Investors took note, especially since Walmart usually discloses nothing about its pharmacy business.

Walmart didn’t provide many details about what caused the margin reduction, but I believe two factors played a key role: (1) lower margins from newly insured consumers (compared with cash-pay consumers), and (2) Walmart’s aggressive participation in preferred networks.

Does this profit announcement signal that Walmart will start emphasizing its pharmacies’ profits over growth? I’m sure that its competitors hope so. Read on and see if you agree.

Looks like stock prices aren't the only things that have stopped rising. As we predicted in April, generic price increases are slowing down.

For the second quarter of 2015, we again found that generic drug price increases were lower than our previous examinations. So far in 2015, no drugs have had with mega-increases that exceed 1,000%. Below, I highlight comments by executives at the large wholesalers that confirm our slowdown analysis.

A separate RBC Capital Markets study (shown below) found an inflection point in the Food and Drug Administration’s (FDA) approval of new generic drugs. If the trend continues, new supply will enter the market and generic prices will decline. Hello, Econ 101!

Meanwhile, the pharmacy industry’s lobbyists may find that faster MAC updates may be quite painful if generic prices start falling. Wheee!

Real-Time Benefit Verification & ePrior Authorization Benchmarking Summit
October 22-23, 2015 | San Francisco, CA
www.cbinet.com/epriorwest

CBI’s third installment of the Real-Time Benefit Verification (RTBV) & ePrior Authorization (ePA) Benchmarking Summit elevates the conversation on the adoption and implementation of electronic patient services (RTBV, eBV, ePA, EMRs, EHRs) by providing concrete case studies and experiences on systems integration, workflow improvements, and information exchange.

Drug Channels readers will save $400 off the standard registration rate when they use code NMK264.*

Featuring a multi-stakeholder faculty, including manufacturers, payers, PBMs, physicians, specialty and retail pharmacies, EHR/EMR vendors and other leading service providers, this summit presents the latest developments and creates a roadmap for next steps needed to achieve success in RTBV and ePA adoption. Visit www.cbinet.com/epriorwest for more information.

Speakers include representatives from:

Allergan | CVS Health | AssistRx | Athenahealth | Blue Shield of California | CenterX | CoverMyMeds | Fairview Specialty Pharmacy | MedSocket | NewCrop | NextGen Healthcare | OA Systems | Pharmacy HIT Collaborative | Pfizer | Point-of-Care Partners | Providence Health Services | RelayHealth Pharmacy Solutions | SureScripts | UCSF School of Medicine | University of Illinois Hospital and Health System | Walgreens

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Pharma distribution nerds, rejoice! Cardinal Health has just released its 10-K annual report for its 2015 fiscal year, which ended on June 30. Unfortunately, Cardinal continues to reduce the amount of information it discloses to investors and others. This year, working capital stats and associated chargeback adjustments have mysteriously vanished from Cardinal's SEC reports and earnings presentations. (When I asked, Cardinal would only say that "it's not a required disclosure." Hmmm...)

Despite the troubling opacity, let's review Cardinal’s China position. As the chart below shows, FY15 revenues at Cardinal Health China were $3.0 billion and accounted for 3% of the company’s total corporate revenues. I include a recent interview with CEO George Barrett, who provides useful insights into China’s political and economic climate.

P.S. Our updated 2015-16 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors will be released in early October. In the meantime, the 2014-15 edition is on sale until September 9.

Time for our annual review of the Inc. 5000 list, the magazine’s annual ranking of the fastest-growing private companies in the United States. While the list includes only those firms that submitted data to Inc. magazine, it offers a useful snapshot of the dynamic world that lies beyond the top 10 specialty pharmacies.

We have identified 10 specialty pharmacies on the 2015 list, which is based upon revenue growth through 2014. Annual revenues range from $11 to $800 million. The pharmacies and key stats are listed below.

Given specialty drugs’ growth prospects, there is an active market for the buying and selling of specialty pharmacy companies. Diplomat Specialty Pharmacy, now that it has gone public, no longer appears on the list. Below, I review the fate of other companies from recent lists that have been acquired. Given Diplomat’s sky-high valuation, consider this year’s ranking to be a shopping list.

IIR’s MDRP 2015
September 30 - October 2, 2015 | Chicago, IL

IIR’s MDRP 2015 is a platform to impact the Final Rule during the comment period and directly influence its outcome. Connect with 550+ MDRP executives and 100+ industry experts to dissect the proposed rule and submit feedback to CMS. Get a head start on your compliance operations for the impending Final Rule implementation.

• September 30th: The AMP Rule Full-Day Pre-Conference-Understand the Application, Implementation and Impact of the Final Rule
• Brace Yourself: The AMP Final Rule is Here! What To Do, What Not To Do & What To Do First
• PANEL: Deconstructing the AMP Final Rule: A Step by Step Analysis of the Key Implications of the Final Rule
• Identify Line Extensions & Implement Alternate Rebate Formula
• Clarification to the Re-definition of Bundled Sales & Its Implications
• How to Categorize & Calculate the 5i's
• Implications of the Expansion of RCP
• Impact of the Final Rule on Class of Trade & Innovator Products
• PANEL: Implementation: Constructing a Final Rule Application Checklist

• October 2nd:
• CMS Pharmacy Updates from John Coster, Director, Division of Pharmacy, CMS
• The AMP Final Rule: Operationalizing for MDRP
• Track One: Impact of AMP on Government Pricing
• Track Two: Post AMP Panel Navigating the Regulatory Framework
• Track Three: Financial Implications of the AMP Final Rule on GP Calculations
• Track Four: Re-assessing GP Methodology post AMP

• October 3rd:
• Keynote Fireside Chat with External Counsel focusing on the legal implications of the AMP Final Rule and how to remain compliant
• Townhall to answer all your AMP related questions

PLUS! Get 340B Updates directly from HRSA on October 1st during the main conference from Michelle Herzog, Deputy Director, Office of Pharmacy Affairs, HRSA, and during the full-day 340B Mega Guidance Compliance pre-conference summit on September 30th.


This is your opportunity to benchmark best practices and gain solutions to overcome new operational challenges brought on by AMP Final Rule, 340B, Medicaid Expansion, Class of Trade, Fair Market Value, FSS, VA, OIG, and other critical government programs.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.