Analysis

Just in time for the first day of spring, Zitter Health Insights (ZHI) has released the latest edition of its Co-Pay Offset Monitor. As far as I know, it’s the most complete resource for tracking these controversial programs.

I last reviewed ZHI’s Co-Pay Offset Monitor in September 2012’s A New Reality Check on Co- Pay Offset Programs. The new edition shows dramatic growth since then:

• There are now 561 co-pay offset programs, up by 34% in less than two years. More than 700 brand-name drugs have co-pay offset programs. (Details below.)

• More than one-third of specialty pharmacy prescriptions used a co-pay offset program. Usage varied dramatically, however, among therapeutic classes. More than half of rheumatoid arthritis (RA) scripts, for instance, had a co-pay offset, while only 7% of oral oncology prescriptions had one.

ZHI’s data highlight the mixed response to co-pay programs: hated for traditional drugs, but welcome for specialty drugs…for now.

Please join me at Armada Health Care’s 2014 Specialty Pharmacy Summit & Expo. This valuable event will take place on May 5-9, 2014, at the wonderful Wynn Las Vegas.

The Summit is a great opportunity for networking with an impressive mix of pharmacies, manufacturers, health plans, wholesalers, hospital systems, pharmacy benefit managers (PBMs), patient advocacy groups, and others. This year’s agenda looks strong, with a good mix of keynotes and a solid business program. You can get a flavor for the event in my review of last year’s Summit in Armada 2013: Specialty Pharmacy Gets More Competitive.

Read on for more details or register now.

P.S. My wife Paula, who runs Drug Channels Institute’s e-learning business, will be attending this year’s Armada Summit. While this is good news for anyone interested in our e-learning modules, it also means that I won't be coming come home with any more photos like this one.

As I describe in Run Away: CMS Abandons Part D Preferred Pharmacy Network Changes, the Centers for Medicare & Medicaid Services (CMS) plan for wrecking Medicare Part D has been temporarily thwarted.

CMS had proposed changes to the Any Willing Provider (AWP) provisions that would have effectively ended preferred pharmacy networks. Judging by the online comments and emails I’ve received since Tuesday’s article, some readers still don’t grasp how such AWP laws raise healthcare costs.

Not to worry. The Federal Trade Commission (FTC) helpfully explains the economic logic in this succinct letter to CMS. It’s a must-read for anyone who wants to understand how competition affects healthcare costs.

If you’re too busy to read this 10-page letter (or my summary below), the key economic issue appears in The Incredibles, one of our family’s favorite movies:

HELEN: Everyone's special, Dash.

DASH: Which is another way of saying no one is.

Read on for the incredible story.

Not content to rest on its laurels after October’s impressive healthcare.gov launch, the Centers for Medicare & Medicaid Services (CMS) proposed drastic changes to almost every aspect of the popular Medicare Part D program in January. To no one’s surprise, CMS has now run away from reconsidered this radical overhaul.

As I describe in CMS Wants It That Way: Big Medicare Part D Pharmacy Changes, CMS wanted far-reaching revisions that would have effectively killed preferred pharmacy networks. Medicare Part D is the rare government program that generally works wells and has widespread support from seniors. CMS proposed so many other changes that it created a diverse opposition, including a bipartisan group in Congress.

The final 2014 open enrollment data for Medicare Part D Prescription Drug Plans (PDPs) document the consumer appeal of preferred pharmacy networks. Consistent with the preliminary numbers, three out of four (75%) seniors enrolled in a PDP with a preferred pharmacy network design. See the updated summary—and the full text of CMS’s about-face—below. Plus, you can see our exclusive behind-the-scenes video of CMS's deliberations.

OFFICIAL DESCRIPTION FROM CBI

The Customized Pharma Distribution Strategies will take place on May 20-21, 2014 in Philadelphia. It is the only event dedicated entirely to strategies and tactics surrounding new and emerging distribution models. You’ll learn how to leverage product-specific alternative models to optimize your channel strategy.

This year’s event features 8 interactive sessions, 2 in-depth workshops 3 keynote panelists, 13+ stakeholder perspectives and a best practices working group. Speakers come from such companies as BDI Pharma, Cardinal Health Specialty Services, Diplomat Specialty Pharmacy, GE Healthcare, Goldman Sachs, ICS–Amerisource Bergen Specialty Group, Mallinckrodt Pharmaceuticals, MG Associates, Pharmaceutical Commerce, Porzio Life Sciences, Sonexus Health, Therapeutics MD, Therigy, UBC – An Express Scripts Company, and more. You won’t want to miss it!

Visit www.cbinet.com/pharmadistribution to learn more.

Drug Channels readers can register with promotional code BAD898 and save $400* off the standard registration rate!

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

Here’s an Oscar-themed look at the 2013 specialty market, adapted from our 2013–14 Economic Report on Retail, Mail, and Specialty Pharmacies.

Our research shows a booming market:

• In 2013, retail, mail, and specialty pharmacies dispensed about $63 billion in specialty pharmaceuticals.

• Specialty drugs accounted for 22% of total pharmacy industry revenues.

• Three companies—Express Scripts, CVS Caremark, and Walgreens—accounted for 63% of revenues from pharmacy-dispensed specialty drugs. The next three largest players had a combined share of about 5%.

Read on for our market share estimates for the top players, observations on the market's structure, and details of my panel discussion with specialty pharmacy leaders at next week’s sPCMA Business Forum.

The Medicaid and Government Pricing Congress, happening June 2-4 at Disney’s Yacht & Beach Club Resort in Lake Buena Vista, Florida, is one of the industry’s largest community gatherings of executives responsible for Contracts, Pricing, Finance, Accounting and Government Programs.

Over the past 15 years, more than 2,500 attendees have benefited from this must-attend meeting, which brings real world topics including Healthcare Reform, Medicaid Expansion, Exchanges, Gross-to-Net, VA/DoD, 340B and Compliance, all into one forum.

Not only is the content and the guidance updates provided at the annual Congress critical, but the networking with industry peers is invaluable. You'll also hear from such government agencies as the Department of Social Services (Connecticut), the Medical Assistance Division (New Mexico), the National Academy for State Health Policy (NASHP), the State of Mississippi Division of Medicaid, the State of Wyoming Medicaid Administrator, the U.S. Government Accountability Office (GAO), and more.

With the release of the Final Rule expected in May, this is a must attend Medicaid event for 2014! Visit www.cbi.com/medicaid for more information.

Drug Channels readers are eligible for a $400* savings off of the full, standard registration rate. Mention promotional code MFZ393 when registering.

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

Our neverending winter is almost over! Get ready for an early spring with my monthly look at noteworthy new stories from the Drug Channels universe. In this issue:

• Hospitals Enter Specialty Pharmacy—Money on their Mind?

• PBMs and Health Plans—Buy or Build?

• New York joins the AAC Revolution—Done right?

• More Specialty Pharmacy Consolidation—Surprise? (No, not really.)

Plus, a really funny video about conference calls.

P.S. If you can’t wait for our monthly news updates, then join the twittering hordes following @Drug Channels.

At the recent 340B Coalition winter meeting, Apexus President Chris Hatwig revealed that 2013 purchases made under the 340B drug discount program were $7.5 billion. Hospitals accounted for 87% of this total. (source) After the article was published, Chris told me that the actual total was $7.2 billion.

Is $7.2 billion a big number? Defenders of the 340B status quo, such as the American Hospital Association, argue that this amounts to “only 2%” of U.S. drug purchases.

However, the 2% figure is just misleading propaganda. In reality, 340B is rapidly taking over the hospital market, which accounts for almost 90% of 340B purchases. Our exclusive analysis, detailed below, shows the reality:

• During the past decade, purchases under the 340B drug discount program have grown by 800%, from $0.8 billion in 2004 to $7.2 billion in 2013.

• In 2013, hospitals received 340B discounts on at least 25% of their drug purchases, compared with only 3% of 2004 purchases.

These numbers are extremely disturbing, since two-thirds of hospitals do not offer the reduced 340B prices to uninsured patients. (See New OIG Report Confirms Our Worst Fears About 340B Contract Pharmacy Abuses.) Given the money at stake, how can this status quo be considered acceptable? Let’s hope HRSA’s forthcoming proposed rule brings greater accountability to this out-of-control market and refocuses the 340B program on uninsured patients.

The Oncology USA 2014 Summit will be held at the Hotel Marlowe in Cambridge, Massachusetts on March 25th and 26th.

More than 20 leading organizations including Sanofi, Merck Serono, Association of Community Cancer Centers, Priority Health and United Healthcare will participate in the event in order to identify the business models and growth strategies crucial to engage key stakeholders with a robust oncology pipeline strategy.

Drug Channels readers can register with discount code BSDC2014 to save $300 on registration. Thanks, eyeforpharma!