Analysis

As predicted, McKesson and Rite Aid announced a new generic purchasing agreement. Click here to read the press release.

Once they get organized, McKesson-Celesio-Rite Aid will be the largest generics buyer in the world. (See table below.) The new relationship has some common elements with the Walgreens-AmerisourceBergen (ABC) tie-up, although McKesson gains a more valuable sourcing position compared to ABC.

More significantly, the deal continues a revolution in how wholesalers interact with their biggest retail customers. Below, I contrast the various wholesaler-customer deals and highlight implications for wholesalers’ channel role, generic buying, downstream speculative buying, AMP-based FULs, and more. Be prepared for more change.

Posted by Drug Channels Institute, an HMP Global company on Thursday, February 20, 2014

Labels: Average Manufacturer Price (AMP), Wholesalers, Generic Drugs, Channel Management, Pharmacy

HRSA’s 340B Program Update, Managing the Coverage Gap, and a Full-Day of Final Rule Insight at IIR’s 6th Annual Government Programs Summit

At IIR's 6th Annual Government Programs Summit happening March 26-28, 2014, in Alexandria, prepare for the impact of the U.S. Department of Health and Human Services June publishing of the 340B proposed rule and get practical solutions to manage the Coverage Gap Discount Program (CGDP) challenges. Download the brochure for full agenda and speaker details.

Understand the rebates and forecasting involvement with the new Part D requirements in the session Practical Solutions Manufacturers can use to Manage Coverage Gap Discount Program Challenges. Hear from Cmdr. Krista M. Pedley, PharmD, MS, CDR, USPHS, Director, Office of Pharmacy Affairs, Health Resources and Services Administration, on 340B program updates. Learn about the latest hot topic areas: Contract Pharmacies, Orphan Drugs, GPO Prohibition, Covered Outpatient Drugs, and Audits in the track 340B Summit for Manufacturers, in collaboration with Apexus' 340B University.

Drug Channels readers can register with code XP1951DC and receive 10% off the standard registration rates. More details below, including a free pre-conference podcast.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, February 19, 2014

Labels: Sponsored Post

An Avalere Health report—Tracking Gaps in State Specialty Pharmacy Reimbursement—highlights an interesting question: Do new state Medicaid acquisition-cost pharmacy reimbursement models adequately compensate specialty pharmacies?

The problem is easy to describe. State Medicaid programs are rapidly adopting acquisition cost methodologies for pharmacy reimbursement. These new models reduce or eliminate pharmacies’ spread profits. Higher Medicaid dispensing fees are benchmarked to retail pharmacies and don’t account for additional services provided for specialty drugs.

This situation, however, is hard to fix. Unless it is corrected soon, patients will be the big losers. Avalere implies that states will step up with higher fees. Instead, I suspect that manufacturers will be expected to pick up the tab as specialty pharmacies' spreads gets squeezed.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, February 18, 2014

Labels: Specialty Drugs, Health Care Policy, Pharmacy

The Pharmacy Benefit Management Institute (PBMI) has just released its 2014 PBMI Specialty Drug Report. (Free download.) The report is stuffed with fascinating insights about how employers view specialty drugs covered under medical and pharmacy benefits.

I was struck by the results on employer perceptions of pharmacy outlets for specialty drugs. Employers think specialty pharmacies provide better pharmacist access and lower costs. However, they also think retail pharmacies are comparable for clinical services—and that surprised me.

The specialty/retail pharmacy distinction is blurring, because many drugstores are chasing the specialty market opportunity. (See Chapter 8 of the new 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies and The Explosion in Accredited Specialty Pharmacies.) Perception may not match reality, but expect these comparisons to become more common.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, February 11, 2014

Labels: Specialty Drugs, Co-pay Offset Programs, Channel Management, Benefit Design, Pharmacy

Last week's OIG report on the 340B contract pharmacies highlighted crucial issues for the controversial 340B drug discount program.

At the upcoming 2014 Medicaid Rebate Summit, many speakers in multiple sessions will address the program. They include Commander Krista M. Pedley, PharmD, MS, Director, HRSA, Office of Pharmacy Affairs, and Chris Hatwig, President, Apexus 340B Prime Vendor. (Full list below.) I'll be there as the keynote speaker, discussing "How Medicaid Will Shape Pharma’s Future."

Drug Channels readers can register with code DC15 and receive 15% off the standard registration rates. Thanks, Conference Forum!

Posted by Drug Channels Institute, an HMP Global company on Monday, February 10, 2014

Labels: Sponsored Post

Posted by Drug Channels Institute, an HMP Global company on Thursday, February 6, 2014

Labels: Hospitals, Health Care Policy, 340B, Pharmacy

In the 340B drug discount program, contract pharmacies are a crucial, but little understood, cog in the 340B money machine. Hospitals can pocket big profits from retail pharmacy prescriptions that are paid by commercial health plans and Medicare Part D. It’s all technically legal, especially since there are no regulations on what’s OK.

With little oversight and big money at stake, I’m not surprised that the program is still expanding at a breakneck pace. Consider:

• Nearly 14,000 pharmacies act as contract pharmacies for a 340B entity. That’s more than 20% of total U.S. retail, mail, and specialty pharmacy locations.

• Our analysis shows that the number of contract pharmacies has grown by 1,073 (+8.5%) over the past six months.

• Walgreens still dominates the market, but Rite Aid, CVS, and Walmart are gaining quickly. (See chart below.)

• More than 100 health systems have mega-networks of 50 or more pharmacies.

• Specialty and mail pharmacies play a larger role in the 340B program.

This will be a big year for the 340B drug discount program. The Health Resources and Services Administration (HRSA) promises to (finally) release long-overdue proposed regulations. The Office of Inspector General (OIG) expects to release a study on “program integrity” of 340B contract pharmacy arrangements. (Details below.) Let’s hope these developments get the 340B contract pharmacy program properly focused on helping needy patients access these medications. But I’m skeptical.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, February 5, 2014

Labels: Channel Management, Hospitals, Health Care Policy, 340B, Pharmacy

Anybody in the rapidly growing Oncology space should consider attending eyeforpharma’s 5th annual Oncology USA 2014 Summit The conference will be held at the Hotel Marlowe in Cambridge, Massachusetts on March 25thand 26th.

Confirmed to speak are experts from Aetna, Amgen, Association of Community Cancer Centers, Connecticut Center for Primary Care, Eli Lilly, Moffitt Medical Group, Molecular Health, Oncology Patient-Centered Medical Homes, Orange Health, Physician Resource Management, Predictive Health, Priority Health, Sanofi, Strategic Oncology, Zitter Health Insights, and more.

Drug Channels readers can register with discount code BSDC2014 to save $200 on registration. Thanks, eyeforpharma!

Posted by Drug Channels Institute, an HMP Global company on Monday, February 3, 2014

Labels: Sponsored Post

How many specialty pharmacies are there?

Surprisingly, even we can’t definitively answer this question. Any pharmacy can designate itself a “specialty pharmacy” if its business focus is self-administered specialty pharmaceuticals covered under a patient’s pharmacy insurance benefit.

Manufacturers and third-party payers therefore limit specialty pharmacy networks. That’s why accreditation is now a key tool for pharmacies that want to dispense specialty medications.

To measure specialty pharmacy growth, we crunched data from URAC, a leading independent accreditation company. As the chart below shows, the number of accredited specialty pharmacies is doubling every year. As of December 2013, there were 59 URAC-accredited companies operating 114 specialty pharmacy locations. We project that next year, those numbers will grow to 110 companies.

More specialty pharmacies and more competition mean channel strategy will be even more important than the Prime Directive. Fascinating.

Posted by Drug Channels Institute, an HMP Global company on Thursday, January 30, 2014

Labels: Specialty Drugs, Industry Trends, Pharmacy

I am pleased to announce the availability of our new report: the 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies. We’re offering special discounts if you order before February 14, 2014.

This completely updated, revised, and expanded 2013–14 edition provides an up-to-date, fact-based analysis of the latest industry developments. If you like Drug Channels, then you'll love this report.

I worked hard to make the report into an essential tool for pharmaceutical manufacturers, wholesalers, pharmacists, pharmacy owners, benefit managers, managed care executives, healthcare policy analysts, consultants, and investors. Whether you're a newbie or a grizzled veteran, the 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies will help you and your team build deep business acumen about U.S. dispensing channels.

Read on for more details, or download the report today. Enjoy!

Posted by Drug Channels Institute, an HMP Global company on Tuesday, January 28, 2014

Labels: Specialty Drugs, Industry Trends, Pharmacy, Pharmacy Economics