Analysis

Time for my annual look at independent pharmacy owners’ business economics, drawn from the recently released 2013 National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here's the press release: NCPA Digest: Community Pharmacists Promoting Medication Adherence, Generic Drug Savings

Once again, independent pharmacy owners are doing better than you might expect. In 2013, overall profits increased (again), while the average pharmacist owning a single pharmacy earned about $247,000. The number of independent pharmacies continues to hold steady.

Bottom line: Smaller independent pharmacies remain an important and healthy industry segment. Keep that in mind when pharmacies ask for any new special legislative protections.

As always, I welcome your constructive comments. Just remember our Drug Channels philosophy, courtesy of the late senator Patrick Moynihan: "Everyone is entitled to his own opinion, but not his own facts."

Specialty Therapies 2015—A Forum for Payers

January 29-30, 2015 | Las Vegas, NV

www.cbinet.com/specialtytherapies

The cost of specialty therapies continues to increase significantly as the number of available specialty drugs grows rapidly. It is crucial to evaluate the best techniques for managing cost, access and quality of specialty therapies.

Now in its 12th year, the Specialty Therapies Summit expands with all new content offerings, networking opportunities and value.

Hear from a distinguished speaking faculty from industry-leading companies including BlueCross BlueShield of South Carolina/BlueChoice HealthPlan, Blue Cross Blue Shield of Tennessee, California Chronic Care Coalition, Denver Health Medical Plan, Inc., Kaiser Permanente, Priority Health, United Healthcare Pharmacy and more!

Visit www.cbinet.com/specialtytherapies for the complete agenda.

Drug Channels readers will save $200 off of the standard registration rate when they use discount code HKN525.*

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

Do you appreciate Drug Channels’ complex, yet accessible content about the pharmaceutical industry? Are you looking for a thorough, cost-effective, and easy-to-use way to help your team grasp important industry concepts?

Then consider Drug Channels Institute’s e-learning modules.

Like Drug Channels, DCI’s e-learning modules are packed with information, yet easy to understand. They are an essential tool for building knowledge and results. We’ve updated the modules for 2014, so you’ll be getting the most current industry insights.

Contact Paula Fein (paula@drugchannelsinstitute.com), DCI’s VP of Business Development, to learn more today.

Or, view an excerpt from The Economics of Provider-Administered Specialty Drugs, one of our most popular. (View the complete list here.)


Our modules can be viewed in any web browser or on an iPad. They contain an audio component, so please enable your audio and crank up your speakers!

In what has become a semi-annual ritual, the Centers for Medicare & Medicaid Services (CMS) last night announced plans to delay the Federal Upper Limits (FUL) and the Final Rule on Covered Outpatient Drugs, a.k.a., the Average Manufacturer Price (AMP) Final Rule. Full text of the non-announcement email below.

You can read about the previous delays here…and here…and here…and, oh yes, here, too.

In its email, CMS confirms that it will do something, at some point in the future, and that it looks forward to partnering with stakeholders whenever it does the thing that it may or may not ever do.

Meanwhile, we'll all just muddle along without clarity on AMP computations, bona fide service fees, the definition of retail pharmacy, and more. It's enough to make any cat grumpy about the Affordable Care Act's implementation.

Here's a pre-Thanksgiving news roundup, to stretch your mind before stretching your stomach next week. In this issue:

• Stuffing—Salix Pharmaceuticals reminds investors why wholesaler agreements matter

• Pumpkin Pie (in the Face)—How Merck beat co-pay card litigation

• Gobble, Gobble—An important update on retail chains’ participation in Part D plans’ preferred networks

Plus, I share a surprisingly useful cartoon that explains the U.S. health insurance system. Next week, show it to your family, so they understand more about your job and the world around us. Happy Thanksgiving!

This Thursday, the Senate Subcommittee on Primary Health and Aging, currently led by U.S. Senator Bernie Sanders (I-VT), will hold a hearing titled “Why Are Some Generic Drugs Skyrocketing In Price?”

The hearing is not a surprise. As I discuss in Congress Grills Generic Drug Makers Over Price Inflation, Senator Sanders and U.S. Representative Elijah E. Cummings (D-MD) have been probing generic manufacturers.

Our latest exclusive analysis (below) finds that generic inflation is alive and well. During the third quarter of 2014, more than one-third of generic drugs became more expensive. A small number of drugs have experienced mega-increases (exceeding 1,000 percent) over the past three months.

I’m skeptical, however, that the Congressional hearing will tell us anything we don’t already know—or anything that Congressmen Sanders and Cummings haven't already concluded.

2015 sPCMA Business Forum
March 16 – 17
Hilton Bonnet Creek, Orlando, Florida

The sPCMA Business Forum is a networking and educational conference designed for professionals of all levels engaged in the business of specialty pharmacy. From an educational standpoint, its speakers are among the industry's top thought leaders. According to PCMA, the sPCMA Business Forum attracts the highest number of pharmacy benefit manager (PBM) and specialty pharmacy decision makers than any other industry conference. The sPCMA offers an outstanding opportunity for networking and conducting business with industry partners and customers.

Conference Features:

• Remarks by C-suite and other senior PBM, specialty pharmacy, and pharma executives
• 25+ educational sessions, including 10+ hours of CPE sessions
• Dedicated time and facilities for private meetings
• Pre-Conference networking through PCMA-Connect http://www.pcmanet.org/pcma-connect
• 10+ Networking Receptions

Who Should Attend:

Anyone interested in attending is welcome. The 1,200+ expected attendees will range from C-suite executives to mid-level professionals tasked with all aspects of the business of specialty pharmacy and overall pharmaceutical care. Companies in attendance will include specialty pharmacies of all sizes and composition, PBMs and payers, manufacturers, wholesalers and distributors, consultants, vendors, and other specialty pharmacy stakeholders.

Register Now!

Contact PCMA

Please contact Jenny Dawson (jdawson@pcmanet.org) with questions and to request information about the Affiliate Program or conference sponsorships.

November’s Health Affairs includes The 340B Discount Program: Outpatient Prescription Dispensing Patterns Through Contract Pharmacies In 2012. (Sorry, the full article is available only to subscribers.)

The paper inadvertently provides compelling evidence that the 340B Drug Pricing Program’s crazy incentives are lowering generic dispensing rates at retail pharmacies. The two lead authors work at Walgreens, which perhaps explains why they try (unsuccessfully) to spin the results away from this unfortunate conclusion.

With few exceptions, third-party payers and PBMs have been minimally engaged in the public policy discussion about how the 340B program should be modernized. Walgreens’ unexpected disclosures about cost-shifting to managed care suggest that they should start paying attention. Read on and see if you agree.

Forging ACO Partnerships
December 9-10, 2014 | Philadelphia, PA
www.cbinet.com/ACO

Forging Accountable Care Organization (ACO) Partnerships offers participants a unique forum for:

• Developing strategies for partnering with ACOs
• Understanding the various ACO models
• Discovering how ACOs are impacting purchasing decisions and physician prescribing behavior

The conference is being held December 9-10 in Philadelphia. Join CBI and your colleagues to convene with peers and discover best practices for adopting accountable care models in the healthcare industry.

The program features two informative case studies, four in-depth workshops, an ACO executive round robin, and a diverse group of pharma and ACOs representing Astellas, Bayer, Pfizer, Premier, Ferring, Amarillo Legacy Medical ACO, MHA ACO Network and many more, discussing innovative solutions to the most significant challenges affecting industry today:

• Discover how to effectively build out a business strategy that aligns to the accountable care models in order to effectively leverage ACO purchasing power
• Review the current climate of patient costs and access and analyze how effective ACOs are, economically, as part of a product sales strategy
• Examine how ACOs are driving physician prescribing behavior for medical groups, health systems and hospitals and understand the impact of adapting procedures to align with value-based contracting
• And much, much more!

CBI is offering Drug Channels readers an exclusive $300 discount when you register with discount code CBI061.*

Register today!

*Offer valid through December 5, 2014, applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to a current registration.

Yesterday, The Wall Street Journal revealed that pharmacy benefit manager Express Scripts is now evaluating a network of pharmacies that don’t sell tobacco products or alcohol. See Express Scripts Eyes Forming Alcohol and Tobacco-Free Pharmacy Networks.

The move is clearly a reaction to Caremark’s no-tobacco preferred pharmacy network. Express Scripts however has gone further with its concept for a “no sin” network.

Below, I ask whether payers really want pharmacies to be goody two shoes. Instead of writing your thoughts on a pound note, let me know what you think by posting a comment below.