Analysis

VA • DoD • PHS • Federal Pricing and Contracts for Bio/Pharmaceutical Companies

December 9-10, 2014

Philadelphia, PA
www.cbinet.com/VADoD

Contracting with the Big Four Federal Programs can be very complex. Pricing models and processes for complying with complicated rules and regulations are difficult for any manufacturer to master.

CBI’s VA • DoD • PHS • Federal Pricing and Contracts is a must-attend event to stay up-to-date on processes and requirements and to gain best practices from your industry counterparts. Learn how to stay profitable in this low-margin, highly complex market.

You will gain insights from experts representing: Amneal Pharmaceuticals, Eisai, Epstein Becker Green, Government Pricing Specialists, Hogan Lovells, Impax Laboratories, IMS Health, M. Lee Consulting, Medicine Access and Compliance Coalition, National Supply Service Center, Nationwide Pharmaceutical, Pernix Therapeutics, Pfizer, Reckitt Benckiser Pharmaceuticals, VA Office of Contract Review, and VA Office of Inspector General.

Drug Channels readers who register before November 7th will save $400 off of the standard registration rate when they use code JDG992.*

REGISTER TODAY!

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

Last Sunday, 60 Minutes aired a controversial anti-pharma story called The Cost of Cancer Drugs. The segment prominently featured several Memorial Sloan-Kettering and MD Anderson physicians, all of whom spoke with no self-awareness about health care costs. (Hints: Drugs are not the problem.) For your consideration, here is a rerun of a still-relevant Drug Channels article from October 2012, complete with my original 340B predictions from that period. P.S. Special pricing for our new 2014–15 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors ends today!

---

Many people blame pharmaceutical manufacturers for high specialty drug prices. Yet channel intermediaries also add to drug prices, via mark-ups that account for the costs, profits, and value of the channel's services. But sometimes these mark-ups are eye-poppingly outrageous, as appears to be the case for North Carolina hospitals.

According to N.C. nonprofit hospitals make big money on cancer drug markups, hospitals are routinely marking up specialty drugs far above Average Sales Price (ASP). For example, the table reproduced below shows that Duke University Hospital received nearly $23,000 for Avastin, versus an ASP of about $6,000. And as reported in Prices soar as hospitals dominate cancer market, hospitals are buying independent oncology practices and then able to charge more “for the same chemotherapy in the same office,” due to differences in payment methods.

For payers, these examples highlight the appeal of channel management strategies such as white bagging and medical benefit management. For manufacturers, the stories illustrate what happens to drug prices as providers consolidate and traditional classes of trade blur.

Read on and be outraged.

October’s Health Affairs focuses on “Specialty Pharmaceutical Spending & Policy,” and it offers many must-read articles for anyone working with specialty drugs. Check out the table of contents. (Sorry, full articles are available only to subscribers.)

The issue includes National Trends In Spending On And Use Of Oral Oncologics, First Quarter 2006 Through Third Quarter 2011, an article I co-authored with Rena Conti, Ph.D., a health economist at the University of Chicago, and Sumita Bhatta, MD, a former oncology fellow at the University of Chicago School of Medicine.

Below, I highlight key findings from our paper. I also discuss a notable and controversial paper on hospitals’ 340B abuses.

Why do generic drug prices continue to rise? In theory, sky-high inflation for a particular product should encourage new suppliers, thereby lowering prices.

Looks like Congress is also curious about the mystery of persistent generic drug inflation. U.S. Sen. Bernie Sanders (I-VT) and U.S. Rep. Elijah E. Cummings (D-MD) sent information requests to 14 generic pharmaceutical manufacturers. Below, I list the companies and provide direct links to the letters.

As you can see from the questions (also listed below), the congressmen are requesting details about pricing, contracts, purchasers, costs, and other internal details.

Political grandstanding, or a potential turning point for generic inflation? Even the most interesting man in the world doesn't know.

10th Life Sciences Trade and Channel Strategies
December 10-11, 2014 | Philadelphia, PA
www.cbinet.com/trade

Are you ready for some drug channel strategy?

Then join me at CBI’s Trade and Channel Strategies conference, being held this December in Philadelphia. CBI’s annual event is the life science industry’s premier event focused on bio/pharma trade, channel, and account management.

I’ll kick things off with a keynote address on "Building Effective Specialty Channel Strategies." I'll update everyone on industry changes and discuss best practices of leading bio/pharma manufacturers.

Day one will end with a Trade Throwdown: Battle of the Experts. This year, Bill Roth of Blue Fin Group and Allen Dunehew or RQ Global Pharma Strategies will join me in CBI’s XTreme Battle Cage™. Three consultants will enter…but only three will leave!


As always, there will be great networking opportunities and loads of breakthrough content. You’ll gain critical insights on industry trends, wholesaler market dynamics, product-specific channel strategies, and tactics for optimizing distribution service agreements.

Drug Channels readers will save $400 off of the standard registration rate when they use code AUX474.* Hope you’ll join me in Philadelphia this December!

UNPARALLELED PERSPECTIVES FROM:

AmerisourceBergen | Blue Fin Group | Boehringer Ingelheim | Depomed, Inc. | Deutsche Bank | Drug Channels Institute | IntegriChain | Jazz Pharmaceuticals | Johnson & Johnson Healthcare Systems Inc. | Mallinckridt Pharmaceuticals | McKesson Specialty Health | Pembroke Consulting, Inc. | RQ Global Pharma Strategies, LLC | RxTrace | SonexusHealth | Sunovion | Therapeutics MD | Therigy | Vertex Pharmaceuticals, Inc.

THE INDUSTRY'S HOTTEST TOPICS:

Specialty Channel Strategies | Alternative Go-to-Market Approaches | Economic Factors Impacting the Drug Channel | Impact of ABC, CAH and MCK Business Changes | Distribution Models Reshaping Trade Dynamics | Impact of ACA, CMS Final Rule, 340B and Shift from AWP Reimbursement | U.S. Serialization Requirements | Globalization, Vertical Integration and Product Specific Implications | and more!

Register today for this awesome event!

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

FYI, I'll be at the AMCP Nexus 2014 meeting in Boston next week.

On Wednesday morning, October 8, I'll be presenting The 340B Drug Pricing Program: Overview, Outlook, and Impact on Managed Care. The photos on the right show you what to expect.

Visit www.amcpmeetings.org for complete session details. If you'll be in Boston, then stop by the session to listen and/or heckle.

On Tuesday, Walgreens released its latest quarterly earnings. During the investor call, Walgreens executives opened up (a little) about the company’s payer contracting problems and the generic drug inflation that triggered its billion-dollar forecasting blunder. Read the excerpts below and see what you think.

On the call, Walgreens also discussed a “significant step down” in its Medicare Part D reimbursement rates, beginning January 1, 2015. One day later, Express Scripts announced that its Part D Prescription Drug Plans (PDP) will have preferred retail pharmacy networks that include Walgreens and 18,500 other, unnamed community pharmacies. (Read the press release.) Working together, can they get the job done?

Autumn has arrived! Time to gather your acorns, make fantasy football trades, and read my thoughts on these Drug Channels stories:

• Walgreens wants to sell its infusion business?!?

• New evidence that generic drug inflation is creating multiple generic tiers

• Texas Medicaid will base pharmacy reimbursement on acquisition costs

• Alliance Boots’ Stefano Pessina is not a fan of tobacco in pharmacies

Plus, the American Medical Association announces an innovative new cost-saving program: placebo doctors!

Government Pricing and Reporting Compliance

December 8-9, 2014

Philadelphia, PA
www.cbinet.com/GPCompliance

As bio/pharmaceutical manufacturers struggle with a rapidly evolving healthcare landscape and heavy government scrutiny on price reporting, the Government Pricing and Reporting Compliance Summit provides the first opportunity to assess the impact of the Final AMP Rule on operations and pricing methodologies. Key stakeholders come together to discuss strategies and best practices to comply with the increasing demands of government price reporting, while mitigating compliance risk.

Reasons to attend:

• Understand the role and importance of the NCPDP and the billing unit standard
• Assess AMP Rule changes and the impact on past, present, and future calculations
• Hear about current OIG oversight involving prescription drug enforcement
• Learn about strategies and procedures you can implement to mitigate risk and ensure contract compliance
• Ensure readiness and compatibility of current GP systems in light of DDR enhancements

Speakers come from such organizations as Arnold & Porter,Bristol-Myers Squibb, Celgene, Chiesi USA, Genentech, IMS Health, Jazz Pharmaceuticals, King & Spalding, OIG’s Office of Evaluation and Inspections, Pfizer, Ranbaxy, Skadden, Arps, Slate, Meagher & Flom, Taft Stettinius & Hollister, and West-Ward Pharmaceuticals.

Plus, extend your stay and benefit from the VA * DoD * PHS * Federal Pricing and Contracts conference. For special group rates, contact Christian.Alongi@cbinet.com.

Drug Channels readers who register before October 31st will save $400 off of the standard registration rate when they use code GTY563.*

Register today!

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

The Medicare Payment Advisory Commission (MedPAC), an independent agency that advises Congress on the Medicare program, recently released Health Care Spending and the Medicare Program, its latest, 200+ page wonktastic data dump. Chapter 10 focuses on prescription drugs.

The latest MedPAC Part B spending data show a surprising increase in Medicare buy-and-bill spending for provider-administered drugs. (See chart below.) After a post-2005 slowdown, spending growth accelerated from 2009 through 2012.

Do these data of prove buy-and-bill’s resilience, or are they a pre-sequestration fluke driven by new therapies and a growing Medicare population? My speculations are below. If you feel brave, make a yummy sound with a comment of your own.