Analysis

The Office of Inspector General (OIG) recently released Medicaid Drug Pricing In State Maximum Allowable Cost Programs. If you own or invest in retail pharmacies, you should read it—anyway, anyhow, anywhere.

The OIG compared existing state Medicaid programs’ generic prescription reimbursement limits with the new limits mandated by the Patient Protection and Affordable Care Act (PPACA), a.k.a. Obamacare. The highlights:

• On average, the new federal reimbursement limits are 22% below the current state amounts.
• Pharmacies in many states will face reimbursement cuts of 30% or more. (See the chart below.)
• Total pharmacy revenues will decline by about $1.2 billion (-0.4%).

One more tricky day for you: The pharmacy industry has successfully lobbied to create state laws requiring that private payers provide “transparency” into generic reimbursement limits. Will savvy private payers rely on the forthcoming government limits to be the bad man?

Posted by Drug Channels Institute, an HMP Global company on Tuesday, October 8, 2013

Labels: Average Manufacturer Price (AMP), Health Care Reform, Generic Drugs, Costs/Reimbursement, Pharmacy Economics

Specialty drugs' growth is generating many new data streams. Unlike a retail pharmacy, a specialty pharmacy may contract with a pharmaceutical manufacturer to provide highly detailed, patient-specific (but de-identified) data for each prescription dispensed. These pharmacy data must then be integrated with other data.

In response to these new flows, CBI is launching a new Specialty Data Optimization Summit. It will be held in Philadelphia, PA, on December 11, 2013. Speakers on the agenda include companies such as Acro Pharmaceutical Services, Astellas, IBM Global, Lilly USA, Occam Health Services, ProMetrics, Roche Pharmaceuticals, and more.

Drug Channels readers can register with promo code PXF783 by Friday, October 11 to save $300 on registration to this one-day event. Thanks, CBI!

FYI, there are two other co-located events: Trade and Channel Strategies (on December 11 and 12), and GPO and Institutional Sales Strategy Summit(on Decmeber 12). See below for additional package discounts.

Posted by Drug Channels Institute, an HMP Global company on Monday, October 7, 2013

Labels: Sponsored Post

Yesterday, I looked at who will pay for our prescriptions drugs in 2022, using drug spending forecasts from the Centers for Medicare and Medicaid Services (CMS). See Public Funds and Exchanges Will Crowd Out Employer-Sponsored Insurance.

As a follow-up, I consider five questions about healthcare reform that could radically alter CMS’s forecasts and disrupt the channel:

• Will private exchanges take off?
• Will employer-sponsored insurance collapse?
• Will copay cards be banned on the public exchanges?
• Will narrow pharmacy networks dominate public exchanges?
• What happens to Pharmacy Benefit Manager (PBM) profits?

It’s not too soon for pharmaceutical manufacturers to consider how market access strategies could change as traditional employer-sponsored private insurance declines. Expect more pressure on the PBM business model, as drug payment shifts to (government-directed) health plans at the expense of self-insured employers.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, October 2, 2013

Labels: Health Care Reform, Co-pay Offset Programs, PBMs, Narrow Networks, Health Insurance Exchanges

The state-level Health Insurance Marketplaces (HIM) launch today, so let’s look at who will be paying for our drugs as healthcare reform kicks in.

In The Outlook for Pharmaceutical Spending Through 2022, I examine the September 2013 drug spending forecasts from the Centers for Medicare and Medicaid Services (CMS). I crunched the numbers again and identified four key insights into the 2022 drug market:

• Public funds, primarily Medicare and Medicaid, will pay for 42% of all drug spending.

• Individually-purchased private insurance (via both public and private exchanges) will account for 5% of drug spending.

• The employer-sponsored insurance market will keep shrinking.

• Consumer out-of-pocket spending will drop to only 10% of drug spending.

The CMS projections are highly precise econometric guesswork. (Hello, dartboard!) Tomorrow, I’ll consider some uncertainties behind these forecasts.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, October 1, 2013

Labels: Health Care Reform, Costs/Reimbursement, Industry Trends, Health Insurance Exchanges

Last Wednesday, well-known group purchasing organization Premier Inc. (NASDAQ: PINC) had a blockbuster IPO. The company had expected to price its shares at $23 to $26. By Friday, its shares closed at $31.69, giving the company an impressive market cap of $892 million.

So, it's a good time to think about the evolving role and activities of GPOs, which is why CBI is offering a one-day conference in December called GPO and Institutional Sales Strategy Summit. Speakers on the agenda come from such companies as Bayer Healthcare, Bristol-Myers Squibb, Institute for Integrated Healthcare, McKesson Specialty Health, Novartis, Sisters of Providence Health System, the Journal of Healthcare Contracting and ACO Insights, VHA, and more.

Drug Channels readers can register with promo code NMX542 by Friday, October 11, to save $300 on registration. Thanks, CBI!

Posted by Drug Channels Institute, an HMP Global company on Monday, September 30, 2013

Labels: Sponsored Post

Today’s guest post is from Karen Bell, Product Marketing Manager at Revitas. In the article below, Karen outlines automation’s value to bio/pharma companies that want to improve contracting, pricing, and compliance.

Please contact Karen Bell (kbell@revitasinc.com) with any questions about the article. And don’t forget to join me at the Revitas Industry Summit: Life Sciences, which will be held at the Four Seasons Hotel in beautiful Philadelphia, PA, on November 5-6, 2013.

Posted by Drug Channels Institute, an HMP Global company on Friday, September 27, 2013

Labels: Sponsored Post, Guest Post

I am pleased to announce the availability of our new report: The 2013–14 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. We’re offering special discounts if you order before October 11, 2013.

If you like Drug Channels, then you'll love this report! The completely updated, revised, and expanded report uncovers the business strategies and hidden economics of U.S. drug distribution companies. Plus, this year’s report has loads of new content about specialty distribution channels.

As always, I worked hard to create an invaluable planning tool for pharmaceutical manufacturers, wholesalers, pharmacy buyers, benefit managers, managed care executives, healthcare policy analysts, investors—anyone who wants to understand and benefit from what's really going on. Whether you're a newbie or a grizzled veteran, the The 2013–14 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors will help you and your team build deep business acumen about U.S. drug distribution.

Read on for more details, or download your very own copy today. Enjoy!

Posted by Drug Channels Institute, an HMP Global company on Wednesday, September 25, 2013

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

Wow, Sunday was the first day of autumn. Time to buy a rake, gather up some acorns, make fantasy football trades, and read these acquisition-related news stories from the Drug Channels universe.

In this issue:

• Harvest Time—Express Scripts rescues Walgreens-backed Part D plan
• Chinese Acorns—Alliance Boots plans a major China pharmacy expansion
• Raking Up—Magellan buys PartnersRx

Plus, watch my latest TV interview, in which I discuss anti-counterfeiting technology and the folly of sketchy online pharmacies. Will Mainers listen?

Posted by Drug Channels Institute, an HMP Global company on Tuesday, September 24, 2013

Labels: Mergers and Acquisitions, International Drug Channels, Drug Counterfeiting, Medicare Part D, Pharmacy

Are you ready for some channel strategy? Then join me at CBI’s Trade and Channel Strategies conference, being held this December in Philadelphia. CBI’s annual event has become our industry’s premier event focused on bio/pharma trade management.

I’ll be kicking things off with a keynote address on " Preparing Trade for the Specialty Revolution." I'll highlight organizational and strategic best practices of leading bio/pharma manufacturers.

CBI has arranged a solid lineup of other speakers from such companies Bayer Healthcare, Bracco Diagnostics, CutisPharm, Insys Therapeutics, IntegriChain, Lazard Capital, Mylan Specialty, Novartis, ProMetrics, Sonexus Health, Teva Pharmaceuticals, VHA, Vivus, and more.

Day one’s last session should be a standout. I invited Bill Roth of Blue Fin Group to go mano-a-mano with me in CBI’s XTreme Battle Cage. Two consultants will enter…but only two will leave!

Drug Channels Readers can register with promo code CTC543 by Friday, October 11, and save $400 on registration! Hope you’ll join me in Philadelphia this December.

Posted by Drug Channels Institute, an HMP Global company on Monday, September 23, 2013

Labels: Sponsored Post

The Centers for Medicare and Medicaid Services (CMS) has once again graced us with its forecasts for national health expenditures. The forecast is summarized in a Health Affairs article: National Health Expenditure Projections, 2012–22: Slow Growth Until Coverage Expands And Economy Improves (free download).

Below, I delve into the prescription drug forecasts and show you some pretty charts. Highlights:

• Prescription drug spending growth, which was negative in 2012, is projected to accelerate to 5.2% in 2014.

• From 2012 to 2022, annual expenditures will grow by $194.2 billion (+75%), to $455.0 billion. During this period, Outpatient prescription drugs will be at about 9% of total U.S. healthcare spending.

• Health care reform will add an extra $15.3 billion in annual drug spending by 2022. This is far below last year’s projected incremental $25.9 billion in spending by 2021.

In a future article, I’ll look at who will be paying for all of these drugs. In the meantime, pity the poor government economists tasked with forecasting healthcare spending. They must bravely peer beyond today’s pitched political battles and economic uncertainty—and then hurl a guess at the 2022 dartboard. Chin up, chaps!

Posted by Drug Channels Institute, an HMP Global company on Friday, September 20, 2013

Labels: Health Care Reform, Industry Trends, Health Insurance Exchanges