Analysis

I am smitten with a deceptively simple chart from the New England Journal of Medicine's July 11 issue.

Regular readers know that I love straightforward graphics that capture complex ideas. In The Gross Domestic Product and Health Care Spending, economist Victor Fuchs creates a clever chart highlighting the long-term relationship between healthcare spending and the overall economy. I reproduce the chart below so you can savor it, too.

Among policy wonks, there is ongoing debate about the recent slowdown in health spending. Are we in the beginning of a long-term slowdown, or just a temporary pause? Look at the chart below, and then contemplate one of the most dangerous phrases in healthcare policy:

This time is different.

Posted by Drug Channels Institute, an HMP Global company on Thursday, July 25, 2013

Labels: Health Care Reform, Industry Trends, Health Care Policy

The Duchess of Cambridge wasn't the only one delivering a surprise yesterday. In an unexpected announcement, the Center for Medicare and Medicaid Services (CMS) announced it will immediately terminate the National Average Retail Price (NARP) survey. (Read the CMS statement below.)

CMS didn’t give a reason, but I presume it’s a sequester-related budget cut. Wise fiscal planning, or another implementation failure for Obamacare?

Despite the move, I don’t think CMS will back away from the more-controversial (and less accurate) National Average Drug Acquisition Cost (NADAC) survey.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, July 23, 2013

Labels: Average Acquisition Cost (AAC), Average Manufacturer Price (AMP), Health Care Reform, Health Care Policy, Costs/Reimbursement, Pharmacy Economics

Check out CBI's Open Enrollment Prep Forum on Patient Navigation and Transition Services. This one-day conference will be in Philadelphia, PA, on September 9, 2013.

The Agenda runs the gamut on patient assistance services, from manufacturer-sponsored PAPs to exchanges and Medicaid. Plus, Health and Human Services will kick off the day with a presentation on the latest patient navigation government initiatives.

Other companies on the agenda include Aetna, AstraZeneca, Biogen Idec, Connecticut Office of the Healthcare Advocate, CSL Behring, Delaware DHSS, Enroll America, Families USA, Johnson & Johnson, MMB Advantages, Patient Services Incorporated (PSI), Pfizer, RxPartnership, United BioSource, Virginia Health Care Foundation, Viropharma, Wisconsin DHS, and more.

Drug Channels readers can register with discount code UDN396 and save $400 off registration!

Posted by Drug Channels Institute, an HMP Global company on Monday, July 22, 2013

Labels: Sponsored Post

Last week, the Safety Net Hospitals for Pharmaceutical Access (SNHPA) launched a new defense of the 340B drug discount program in Setting the Record Straight on 340B: A Response to Critics. (free download) The reports takes aim at multiple critics, including an apparently notorious “Fein Blog.” Despicable me!

SNPHA rightly states that 340B contract pharmacies should “…maintain or expand access to affordable drugs for vulnerable patient populations in more convenient locations within their communities.”

So, let’s look at the reality of today’s booming 340B contract pharmacy market:

• One out of five retail pharmacies is now a contract pharmacy for a 340B entity.
• Walgreens dominates the market, with nearly 5,400 340B contract pharmacies. Other chains are distant also-rans.
• While many networks are small, some hospitals now have networks with more than 100 retail pharmacies.
• Despite being located in densely populated urban areas, some hospitals’ networks extend to pharmacies that are more than 50 miles away or located in other states.

Clearly, the 340B contract pharmacy market is larger and much more developed than many people believe. At this point, it's not clear that multi-billion dollar health systems' mega-networks, featuring mega-chains, are truly serving the neediest patients in local communities.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, July 16, 2013

Labels: Health Care Policy, 340B, Pharmacy

I invite you to join me at CBI’s 2nd annual Bio/Pharmaceutical Retail Strategy Summit. The conference is being held at the Loews Hotel on September 18-19, in Philadelphia, PA.

I'll be delivering the keynote address, on "The Pharmacy Industry Outlook." In addition to the latest news, I'll discuss some of my favorite topics, such as Managing the Specialty Pharmacy Channel's Evolution and What Free Generic Lipitor Says about Pharmacy's Future.

CBI has arranged a strong and diverse lineup of speakers from such companies as Armada Health Care, Astellas, Catalina Health, Depomed, Eisai, Innovati, inVentiv Medical Management, Kinney Drug, Kmart, Eli Lilly USA, Marley Drug, McKesson Specialty Health, Pfizer, Renaissance Pharma, United Healthcare, Vertex Pharmaceuticals, Walgreens and more. As a bonus, you can network with attendees from the 4th Annual Forum on Strategic Distribution Planning for Specialty Products and the Point of Care Marketing Summit during shared in-conference workshops on September 19.

Drug Channels readers can register register with code PSE566 and save $400 off the standard rate. Thanks CBI!

Posted by Drug Channels Institute, an HMP Global company on Friday, July 12, 2013

Labels: Sponsored Post

The Centers for Medicare and Medicaid Services (CMS) have just made public a must-read analysis of preferred pharmacy networks in Medicare Part D Prescription Drug Plans (PDPs). Read it here: Part D Claims Analysis: Negotiated Pricing Between Preferred and Non-Preferred Pharmacy Networks.

CMS examined March 2012 claims at 13 Medicare Part D Prescription Drug Plans (PDPs) with a preferred pharmacy network. Here’s my summary of the CMS data:

• On average, preferred pharmacies had prescription costs that were about 6% cheaper than those of non-preferred pharmacies.
• The four biggest plans, accounting for 93% of claims, had average savings of 8% at preferred pharmacies.
• Surprisingly, preferred pharmacy costs were higher in five of the 13 plans. These plans accounted for only 4% of total claims, so this unexpected result didn’t affect the overall savings.

By demonstrating cost savings, the new CMS report will accelerate the growth of preferred pharmacy networks. Manufacturers can start getting ready for these networks by reading Pharmacy Benefit Networks: The Big Squeeze, my article from the May 2013 Pharmaceutical Executive.

PBMs, which favor preferred networks, cheered the CMS-documented cost savings. Independent pharmacies, which oppose these networks, touted problems with the five higher-cost plans. I explain the disparate perspectives below.

Posted by Drug Channels Institute, an HMP Global company on Thursday, July 11, 2013

Labels: Benefit Design, Pharmacy, Channel Management, PBMs, Narrow Networks, Medicare Part D

Well, pierce my ears and call me drafty!

In response to my Freedom of Information Act Request, the Health Resources and Services Administration (HRSA) provided me with its previously-undisclosed letter to the Safety Net Hospitals for Pharmaceutical Access (SNHPA) regarding Amgen’s distribution strategy for Neulasta. For background, see With a Top Secret Letter, HRSA Blesses Amgen’s New 340B Distribution Plan.

As a public service, I am including the full letter below.

Unfortunately, Commander Pedley’s letter doesn’t reference any specific regulation, rule, notice, guideline, law, FAQ, letter, or presentation. Apparently, the 340B drug discount program relies on little more than the unaccountable whims of an ever-burgeoning bureaucracy. The letter is also sadly consistent with the Obama administration's make-it-up-as-we-go-along approach to health care policy. Just my $0.02, but this is no way to run the fast-growing, multi-billion dollar 340B drug discount program, especially since the program is already being used in questionable ways.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, July 9, 2013

Labels: Channel Management, Health Care Policy, 340B

What's hotter than specialty channel strategy? Not much, judging by what I spend my time on. If you feel the same way, then check out CBI’s 4th Annual Forum on Strategic Distribution Planning for Specialty Products, coming this September.

This worthwhile and timely event will appeal to many Drug Channels readers. Topics include network strategies, logistics, reimbursement hubs, REMS, contracting, and more. Companies on the agenda include Acorda Therapeutics, Armada Health Care, CIS, EMD Serono, Innovatix, inVentiv Medical Management, Ipsen, McKesson Specialty Health, Occam Health Services, Pfizer, ProMetrics, Sonexus Health, Walgreens and more.

As a bonus, you can network with attendees from the Bio/Pharmaceutical Retail Strategy Summit and the Point of Care Marketing Summit during shared in-conference workshops on September 19.

Until July 26, Drug Channels readers can register with discount code DPK478 and save $400. (This special discount cannot be combined with the advantage pricing offer). After July 26, register with discount code HSA327 and save $300 (no expiration date). Thanks, CBI!

Posted by Drug Channels Institute, an HMP Global company on Monday, July 8, 2013

Labels: Sponsored Post

I want to know what you think of the blog and how I can improve it.

What's in it for you? Well, just answer 4 very brief questions—the survey should take 5 to 10 minutes, tops—and you could win a free Drug Channels Institute report. Here's the survey link:

The 2013 Drug Channels Reader Survey

You can answer anonymously.

But if you provide an email address, you'll be entered in a drawing to win a free corporate license of either the 2012-13 Economic Report on Retail, Mail, and Specialty Pharmacies (a $2,980 value) or the 2012-13 Economic Report on Pharmaceutical Wholesalers (a $2,950 value). If you win, you'll choose whichever report you want.

Any information you provide will be held in the strictest confidence. Per Drug Channels long-standing policy, I never publish, release, or disclose any personal data without your permission.

Please let me know if you have any questions or comments. Thanks in advance for helping me help you!

Posted by Drug Channels Institute, an HMP Global company on Monday, July 1, 2013

Labels: Blog Administration

Before you leave for the July 4th holiday, take a few minutes to read the latest collection of Drug Channels news stories. This month, I highlight three especially provocative articles:

• Greed is Still Good—McKesson’s CEO keeps cashing in
• Customer Experience Beats Location—Walgreens reorganizes for growth
• Innovation is Even Better—Negative consequences of the generic wave

Plus, a special patriotic message from Sam the American Eagle. Happy 237th birthday, America!

Posted by Drug Channels Institute, an HMP Global company on Thursday, June 27, 2013

Labels: Wholesalers, Generic Drugs, Pharmacy