Analysis

At IIR's Oncology Management Summit, taking place July 21-23 in Philadelphia, you will walk away with solutions to the most critical issues within the cancer care value chain: excessive costs, access to affordable care, incorporating new technology, and meeting new value and quality standards for patient-centered care. Pioneers in oncology share never-before-heard research and perspectives to drive your programs and patient care strategies forward.



2014 Event highlights include:

• NEW! Delve into the role of specialty pharmacy in oncology during the pre-conference summit
• NEW! Sessions on the impact of Big Data as it transforms cancer care management
• More than 40 dedicated sessions with a focus on economic and cost issues, quality and value of patient access & care, and data and technology driven strategies

Don't miss out on this unprecedented opportunity for to connect with ALL KEY STAKEHOLDERS across the cancer care continuum.

DOWNLOAD THE BROCHURE at www.IIROncologySummit.com.

Yesterday, I focused on Untangling Express Scripts’ 2013 Drug Trend Report. Today, I explore the report’s unexpectedly large forecast errors for traditional drug trend, and what they mean for PBMs’ formulary management.

As I document below, 2013 drug trend was positive and higher than Express Scripts’ forecast for three major traditional drug therapy classes, none of which had a major generic launch. Express Scripts blamed the higher-than-expected trend on manufacturers’ drug pricing.

To coincide with its new drug trend report, Express Scripts launched an attack on drug prices, focusing on Gilead’s hepatitis C pill Solvaldi (of course). Dr. Steven Miller, Express Scripts’ chief medical officer, even implied that Sovaldi could “lose all its market share” when competitors launch. (Full quote below.) No surprise if you had read Express Scripts Plans a Specialty Drug Price War last December.

Given Express Scripts’ difficulty in projecting traditional drug trend for therapy classes without new generic launches, the tough talk may be premature. Read on and see if you agree.

Express Scripts has just released the latest edition of its long-running Drug Trend Report. Start with the Table of Contents. Be forewarned: the report is now a nearly unusable series of more than 100 web pages. (See my tech-whining below.)

If you look hard enough, you’ll find valuable insights into our changing industry, along with data on 2013’s drug trend (the change in prescription drug expenditures of a third-party payer). Here are my highlights:

• Drug trend for traditional drugs increased by 2.4%, a big turnaround from last year’s -1.5% decline.

• Drug trend for specialty drugs increased by 14.1%, its lowest rate since 2007.

• Specialty drugs accounted for 27.7% of total spending, up from 24.4% in 2012.

• Specialty spending remains highly concentrated within four therapy classes.

Tomorrow, I’ll look at Express Scripts’ tough talk on hepatitis C drug prices and how this new report illustrates PBMs’ challenges in controlling these costs.

Just in time for the Phillies’ Opening Day, the Medicare Payment Advisory Commission (MedPAC), an independent agency that advises Congress on the Medicare program, just wound up and delivered its latest Report to the Congress: Medicare Payment Policy (March 2014). As always, this annual box score report is in a league of its own. It provides an invaluable Medicare Part D status report, including stats on program design, enrollment trends, benefit design, costs, and prices.

In Chapter 14 (starting on page 353), MedPAC calculated the share of pharmacies listed as “preferred” by the largest Part D Prescription Drug Plans (PDPs). (The key data are reproduced below.) For 2013, MedPAC found that:

• Most PDPs contracted with more than 95 percent of pharmacies in their respective regions.

• Part D plans typically designated about one-third of these pharmacy players as “preferred.”

• The two largest co-branded plans—Aetna CVS/Pharmacy and Humana Walmart—had the smallest preferred networks.

Although CMS withdrew its attempt to strike out preferred networks, I expect that the agency will try again. As I explain below, MedPAC’s analyses and recent letter to CMS provide a game plan for preferred networks’ future. Meanwhile, manufacturers should catch up on their spring training with Pharmacy Benefit Networks: The Big Squeeze.

As one of the longest running annual conferences dedicated to managed markets professionals, CBI’s Managed Care Market Strategies, June 23-24 in Philadelphia, brings together key stakeholders to discuss how to demonstrate product value and identify payer needs. This is a unique opportunity for manufacturers to review proven strategies, develop new means of demonstrating product value and maximize a product’s position in an evolving managed market environment.

What to Expect in 2014 – The Most Interactive Format Yet!

• Featuring 2 Think Tank sessions designed to provide a multi-faceted exchange of ideas
• Hear multiple payer and manufacturer perspectives as they participate in the exclusive Stakeholder Examination debate session
• Delve deeper and engage with presenters in the Ask the Experts discussion panels
• Gain payer perspectives to determine better resource allocation decisions for marketing and contracting
• Examine how healthcare reform will impact future business relationships with payers, increase cost and evidence/value scrutiny
• Leverage outcomes, medical and specialty data to support and redefine the product value story

Download the agenda or visit www.cbinet.com/managedcare to learn more!

Drug Channels readers can save $400 off of the standard registration rate with promotional code SAZ999. (Cannot be combined with other offers or used towards a current registration. Other restrictions may apply.)

I had a little fun with this year’s April Fools’ Day post, but there is a serious debate about the pharmacy industry’s role in tobacco sales.

Below is an guest editorial from two of the physicians behind TobaccofreeRx, a group that advocates against the sale of tobacco products in pharmacies. The authors criticize such groups as the American Heart Association and the Department of Health and Human Services.

They conclude: “Corporations that choose to sell tobacco products should no longer be granted licenses to dispense medications or provide other health care services.”

What do you think?

The great tobacco-in-pharmacy debate just got A LOT more interesting! This morning, Walgreens announced plans to start selling marijuana in the states that have legalized cannabis. Read the press release.

Here’s a key quote from the press release:

“Marijuana is used in the treatment of several conditions, including glaucoma, cancer, and multiple sclerosis,” said Walgreens spokesperson Calvin Broadus. “Walgreens will offer an industry-leading consumer experience and the widest selection of primo strains, including such top sellers as Black Rhino OG Kush and Strawberry Cough. While our competitors are abandoning smokers, we remain proudly at the Corner of Happy and Hacking®.”

Beginning with locations in Washington and Colorado, Walgreens will launch a new "High Experience" retail store format. Each store will feature a special Weed Corner™, a dedicated space where consumers can attend education events and purchase everything they need for a cannabis-based lifestyle. The press release mentions such items as rolling papers, lighters, Doritos, Hacky Sacks, Funyons, and the Grateful Dead’s seminal 1970 album, “American Beauty.”

The new store format will also sell OTC products from Alliance Boots’ private label brand, including Formula No. 420 Redness Relief Eye Drops.

Walgreens promises “Friendly Service and Expert Advice” and consultations with board-certified dealers who will diagnose and treat families' everyday ganja needs. These dealers can even write prescriptions if needed for things like bachelor parties, Phish concerts, or like, whatever, dude.

Read on for important information about this bold strategic move.

Tax inversion is a wonky-sounding term to describe a company’s moving its headquarters from a high-tax nation to a low-tax nation. And now an inversion could relocate the post-2015 Walgreen-Alliance Boots organization from the U.S. to Switzerland.

On last week's earnings call, President and CEO Greg Wasson emphatically denied the possibility of such an inversion. But as I argue below, it will probably happen anyway. If so, Alliance Boots management will end up running the combined company, while Walgreens’ U.S. management and its Deerfield headquarters employees will be unemployed.

Read on and see if you agree…

Anyone interested in the future of the 340 drug discount program should read Unfulfilled Expectations: An Analysis of Charity Care Provided by 340B Hospitals, a depressing new report on the program’s current oversight failures.

This analysis, which was funded by the Alliance for Integrity and Reform of 340B (AIR 340B) and conducted by Avalere Health, discovered that most 340B-eligible hospitals do not provide much charity care. (Details below.) Only 22% of hospitals account for 80% of the total charity care that 340B hospitals provide. These new data are consistent with the Office of Inspector General’s recent finding that two-thirds of the hospitals do not offer discounted 340B drug prices to uninsured patients.

Safety Net Hospitals for Pharmaceutical Access (SNHPA) immediately shouted, “Bah! Humbug!” But now that so many uncomfortable 340B facts are being revealed, SNHPA may see its shrill, uncompromising position marginalized as change comes to the program.

Get ready for spring by staying inside and reading our latest selection of noteworthy Drug Channels news stories.

In this issue:

• Bigger—AmerisourceBergen joins the fun in Brazil

• Badder—Good video on drug costs at hospitals vs. cancer clinics

• Madder—Oncologists dislike becoming hospital employees

• Sadder?—States are trying to eliminate specialty drug tiers

Plus, The Onion helps you fill out the rest of your 2014 NCAA Tournament bracket. Win a billion dollars yet?

P.S. Birds aren’t the only things that are tweeting. Follow @Drug Channels for regular updates on news stories that catch our eye.