Analysis

Last week, AmerisourceBergen (NYSE: ABC) reported financial results for the March 2013 quarter. Here’s the press release: AmerisourceBergen Reports $0.87 in Diluted EPS from Continuing Operations, and Revenue of $20.5 Billion for the March 2013 Quarter.

One surprise was the “disappointing performance” in ABC’s oncology business, which accounts for about 40% of its Specialty Group business and 7% of overall revenues.

While management pointed to the sequester, such oncology market changes as practice consolidation and white-bagging are bigger long-term negatives for specialty distributors. Below, I highlight some telling comments by CEO Steve Collis regarding the industry’s evolution.

Specialty distributors face significant risks from changes in the community oncology market. Do ABC’s results foreshadow an oncology market turning point, or simply reflect a short-term government reimbursement cut? Will the specialty distribution and full-line wholesale trade classes blur together? Read on and see what you think.

Posted by Drug Channels Institute, an HMP Global company on Thursday, May 2, 2013

Labels: Specialty Drugs, Group Purchasing Organizations (GPOs), Wholesalers, Channel Management, Industry Trends

Baseball season is finally here! Oil up your glove, put on your cleats, and let's run the bases around this month's news stories. Remember: Sometimes you win, sometimes you lose, and sometimes it rains.

In this issue:

• Home Run: How Express Scripts and Medco won antirust approval
• Green Monster: MHA's billion-dollar price tag highlights GPO valuations
• Free Agents: Consumers are price-shopping for prescriptions
• Batter Up: A look at the latest national track & trace legislation

Plus, just in time for baseball season, The Onion profiles an electrifying new entrant into the Philadelphia Sports Hall of Fame. Go Phillies!

Posted by Drug Channels Institute, an HMP Global company on Tuesday, April 30, 2013

Labels: Group Purchasing Organizations (GPOs), Generic Drugs, Mergers and Acquisitions, Pedigree, PBMs, Pharmacy Economics

Time to get ready for IIR’s 18th Annual Summit on the Medicaid Drug Rebate Program (MDRP)! This mega-event will be held at the Chicago Marriott Downtown Magnificent Mile in Chicago, Illinois on September 9-11, 2013.

The MDRP typically sells out, so you should register as soon as possible. The 2013 agenda looks very strong, so I expect this year's event to be extremely popular, too.

Where else can you attend such sessions as "AMPs, NARPs, NADACs, and FULs Oh My!" or play the "GP Geek Game - Wheel of Fortune"? (Yes, these topics are really on this year's jam-packed agenda.) See more details below or visit the MDRP site.

Drug Channels readers can register with promo code XP1858DRC and save $400 off the standard registrations rates. Thanks, IIR!

Posted by Drug Channels Institute, an HMP Global company on Monday, April 29, 2013

Labels: Sponsored Post

Today’s guest post is from Becky Holloway, Product Marketing Manager at Revitas. In this informative article, Becky describes the flaws of manual data management and the limits of outsourced data cleansing.

Becky highlights Revitas’s new Online Savings Calculator, a neat tool for assessing the savings from in-sourced prescription level data scrubbing

Please contact Becky Holloway (bholloway@revitasinc.com) with any questions about the article.

Posted by Drug Channels Institute, an HMP Global company on Friday, April 26, 2013

Labels: Sponsored Post, Guest Post

As expected, CVS Caremark (NYSE: CVS) said "never gonna give you up" and renewed its distribution agreements with Cardinal Health (NYSE: CAH) and McKesson (NYSE: MCK). Cardinal will continue to service the CVS retail stores and distribution centers, while McKesson will continue to service the Caremark mail facilities and some small retail business. Press release links below.

For Cardinal, this news is a big relief following the loss of Express Scripts and Walgreens. As I suggest in Making Sense of ABC-Walgreens-Alliance Boots, the loss of two large, low-profit customers could turn out to be a blessing in disguise.

The renewal also demonstrates wholesalers' value in the brand-name pharmacy supply chain. In theory, the largest self-warehousing chain drugstores and mail pharmacies have the size and scale to perform the functions of drug wholesale distribution. Yet in 2012-13, these larger companies all elected to buy brand-name drugs via a drug wholesaler rather than directly from a manufacturer.

No details about the economics. We can presume that CVS Caremark got a slightly better deal vs. its current agreement, although the economics are not as straightforward as you might expect. Read on for some quick context.

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

Labels: Wholesalers, Pharmacy

Drug Store News (DSN) just released it latest list of the top pharmacy retailers in the regally-titled PoweRx Players: Profiles of the Kings of Retail Pharmacy. (free download)

I highly recommend the PoweRx list to anyone who competes with, sell to, or interacts with retail pharmacies. This useful resource provides brief profiles of the top 50 companies. These range from Walgreens (#1, with $45.3 billion in prescription sales) to Ritzman Pharmacy (#50, with $57 million in prescription sales). Put another way, the largest chain drugstore dispenses nearly 800 times as much as the 50th largest drugstore.

DSN's top 20 largest pharmacies are shown below. I explain why the DSN list differs from our 2012 Market Share of Top Pharmacies.

Regardless of how you count, it’s good to be the king.

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

Labels: Industry Trends, Pharmacy

The agenda for CBI’s 2013 Commercial Contracts and Chargeback Management forum has just been released. Lots of good topics, including: 340B, chargeback computations, class-of-trade development, and (of course) healthcare reform.

Speakers come from such companies as American Health Care, Amerinet, Apexus/340B Prime Vendor Program, Auxilium Pharmaceuticals, Cardinal Health, Celgene, Compliance Implementation Services, Daiichi Sankyo, Eisai, Eli Lilly & Company, GS1 Healthcare US, Healthcare Supply Chain Association (HSCA), Horizon Pharma, McKesson, Novo Nordisk, Pfizer, PSS World Medical, Purdue Pharma, Revitas, and more.

Drug Channels readers can register with code FZT663 and save $500. Thanks CBI!

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

Labels: Sponsored Post

Let’s take a look the just-released 2013 edition of the EMD Serono Specialty Digest, a great report on payer and managed care strategies for specialty drugs. The report is free, but has a bizarre site registration process. Why do I need a super-secret password (plus a password hint) to download a free report? Anyway...

As far as I know, the EMD Serono reports provide the only public specialty drug reimbursement data for pharmacy and medical settings. Some highlights:

• Health plans pay 82.9% of Average Wholesale Price (AWP) to specialty pharmacies. Retail pharmacies receive slightly more.
• Physician offices are still being compensated using a mix of reimbursement methodologies: Average Sales price (ASP), AWP, or provider capitation.
• When using Average Sales Price (ASP), health plans pay mark-ups that are twice the (pre-sequester) Medicare Part B rate.
• With a little math, the survey results show when white-bagging is cheaper than buy-and-bill.

Thanks again to EMD Serono for again sponsoring this valuable research. Read on for the wonkeriffic reimbursement details.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, April 17, 2013

Labels: Specialty Drugs, Costs/Reimbursement, Average Sales Price (ASP), Pharmacy Economics

Last week, CVS Caremark (NYSE:CVS) released the 2013 Insights Report, its drug trend report for 2012. I review the comparable Express Scripts (NASDAQ:ESRX) report in Insights from the 2012 Express Scripts Drug Trend Report.

The numbers appear to show a clear advantage for CVS Caremark in managing drug trend—the change in prescription drug expenditures of a third-party payer. For commercial plan sponsors in 2012, overall trend for CVS Caremark customers was 0.3%, while trend for Express Scripts customers was a comparatively lofty 2.7%. The gap was especially large for traditional (non-specialty) drugs.

So, is CVS Caremark really better? Probably not, but who really knows? A deeper looks highlights hidden methodological discrepancies that make it impossible to determine the best PBM.

A PBM’s drug trend report is the bikini of pharmaceutical economics. What it reveals is interesting, but what it conceals is essential. Read on and see if you agree.

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

Labels: Costs/Reimbursement, Industry Trends, Benefit Design, Specialty Drugs, PBMs, Pharmacy Economics

I'm pleased to welcome CBI’s Managed Care Rebate Agreements event as a new Drug Channels sponsor. This one-day seminar is being held at the DoubleTree hotel in Philadelphia, PA, on June 18, 2013.

The agenda has lots of practical advice for negotiating, structuring, and managing rebate agreements. Speakers come from such companies as Acorda Therapeutics, Activus, Connolly LLC, GlaxoSmithKline, IMS Health, ModernHEALTH, PharmaMetrics, PriorityHealth, Ventegra, and more. You can get ready for this event with the benchmarking data in A Peek at Manufacturers’ PBM Rebates.

Drug Channels readers can register with discount code XGE392 and save $300. Thanks CBI!

Posted by Drug Channels Institute, an HMP Global company on Monday, April 15, 2013

Labels: Sponsored Post