Analysis

If you are interested in specialty drug management, I suggest you download the extensively-titled 18th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care. (Free download.) This new report provides great insight into employer-sponsored health care, including: cost trends, premiums, employee contribution strategies, and healthcare reform.

For the first time, the report also summarizes employer strategies for specialty pharmacy. The news isn’t pretty, with employers planning more aggressive specialty drug utilization management. The report doesn’t delve deeply into more exotic strategies, such as coordinating medical and pharmacy benefits or implementing tighter specialty channel shifts.

Pharmaceutical manufacturers should start planning for tighter specialty pharmacy management. Unique specialty therapies do not usually contract for access, but that will change as the rules tighten.

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

Labels: Specialty Drugs, Industry Trends, PBMs

Senator Charles Grassley (R-IA) has uncovered some very uncomfortable truths about the out-of-control 340B drug discount program. The Charlotte Observer has a summary: NC hospitals reap profits from discount drugs. (Original source documents linked below.)

The latest disclosures from three North Carolina hospitals should make everyone rethink the 340B program’s purpose, functioning, and oversight. For instance, about 90% of 340B patients have insurance from Medicare, Medicaid, or a commercial payer. What’s more, hospitals earn large profits from the already-insured prescriptions of these patients. Duke University Health System’s gross profits from the 340B program were almost $300 million over the past 5 years. Duke’s 340B pharmacy gross margin was 53%.

Defenders of the 340B program claim that these outcomes are perfectly fine. Yet, we don't even know whether hospitals are providing adequate data so that pharmaceutical manufacturers can avoid double-paying rebates on commercial and Medicare prescriptions.

Did Congress really intend for pharmaceutical manufacturers to subsidize part of the general charity care provided by highly profitable, multi-billion dollar health systems? Read the evidence below and post a comment with your reactions.

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

Labels: Enforcement, Health Care Policy, 340B, Costs/Reimbursement

Drug Channels is pleased to welcome CBI’s West Coast and East Coast Sunshine & Aggregate Spend Forums as a new sponsor.

Check out the April 23rd West Coast agenda. The event features speakers from such organizations as Bull’s Eye Innovations, California Attorney General’s Office, CareFusion, Compliance Implementation Services (CIS), Dendreon Corporation, Edwards Lifesciences, Endologix, Health Market Science (HMS), Medivation, PhRMA, Polaris, Porzio Life Sciences, PwC, Sanofi, Shire, Takeda Pharmaceuticals, and more.

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

Labels: Sponsored Post

The Medicare payment Advisory Commission (MedPAC) just released its latest Report to the Congress: Medicare Payment Policy (March 2013). As always, this annual report is a dream come true for Medicare policy wonks. (You know who you are!)

Chapter 15 (starting on page 355) provides a valuable Medicare Part D data dump, including information on program design, enrollment trends, benefit design, costs, and prices. Below, I pluck out the surprising news about Medicare Part D prices. Key highlights:

• From 2006 to 2010, Medicare Part D drug prices grew by only 0.5% per year. (Since rebates are excluded from the computations, the data probably overstate price increases.)
• To increase generic substitution, Part D plans used very aggressive benefit designs, which contributed to the slow price rise.
• Drugs in Part D’s six protected classes weren’t very protected from generic substitution.

These results provide one more reason why we should be hesitant to alter the highly successful Part D program, per my comments in the February news roundup. And by using underlying CMS data, the new report thoroughly refutes the politically-motivated and inaccurate Part D pricing studies conducted by the AARP and the University of Minnesota. An ounce of data is worth a pound of opinions.

Posted by Drug Channels Institute, an HMP Global company on Thursday, April 4, 2013

Labels: Costs/Reimbursement, Benefit Design, Medicare Part D

On Monday, the Center for Medicare and Medicaid Services (CMS) released its 2014 Rate Announcement and Final Call for Medicare Advantage and Part D plans. For MA plans, the big news is a surprising 3.3% rate increase, rather than a 2.2% cut.

CMS also had some tough talk for preferred pharmacy networks in Medicare Part D Prescription Drug Plans (PDPs). Below, I explain CMS’s biggest concerns, which include network entry, pharmacy fees, and beneficiary communications. Plan sponsors: You have been warned!

P.S. Stay tuned for my forthcoming Pharmaceutical Executive article explaining why manufacturers should be worrying about narrow pharmacy networks.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, April 3, 2013

Labels: PBMs, Narrow Networks, Pharmacy, Medicare Part D

Drug Channels is pleased to welcome IIR’s Collaborative Summit for Oncology Management as a new sponsor. This event is being held at Chicago's Wit Hotel on June 17-18, 2013.

Check out the agenda, which features a good mix of speakers from such organizations as Aetna, the Cancer Treatment Centers of America, Cardinal Health Specialty Solutions, Community Oncology Alliance (COA), Manhattan Institute for Policy Research, Moffitt Cancer Center, National Comprehensive Cancer Network (NCCN), Northwest Georgia Oncology Centers, Physician Network (iPN), Roche, UBC, United HealthCare and more.

Drug Channels readers can register with promo code XP1814DRC and save $400 off the standard registration rates. Thanks, IIR!

Posted by Drug Channels Institute, an HMP Global company on Tuesday, April 2, 2013

Labels: Sponsored Post

Hospitals better get ready for some new competition! This morning, Walmart announced plans to offer discount surgical procedures, with an initial focus on liposuction. Liposuction procedures typically costs more than $6,000, but Walmart will price lower and upper abdomen liposuction at $249.99. Clearly, Walmart is following the price leader strategy that allowed it to become the country's fourth-largest pharmacy.

Here’s a telling comment from the press release:

“We view liposuction as a true lifecycle product for Walmart consumers,” said David St. Hubbins, M.D., chief medical officer at Walmart’s Health and Wellness Division. “As America’s number one seller of lard-based snack products, Walmart has provided unparalleled support for the nation’s obesity epidemic. Now, we can provide a low-cost solution to this ever-growing market segment.”

Walmart claims to be the retailer of choice for 83% of Americans who weigh more than 350 pounds. The company expects 29% of its liposuction customers to be "double dippers"—consumers who will take advantage of Walmart’s low food prices to regain the weight, and then purchase a second lipo procedure.

Another positive tailwind is favorable legislation, such as Mississippi’s new law outlawing the sale of soft drinks in containers smaller than 20 ounces.

Read my comments below for speculation on what this means for hospital marketing and med-surg distribution channels.

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

Labels: Fun Stuff

Tom Gallucci and his team at Lazard Capital Markets (LCM) have estimated “oral solid generic purchasing power” for the biggest U.S. drug buyers. Unsurprisingly, the new ABC-Walgreens-Alliance Boots combination tops the list. See the full list below. (Sorry, I can’t share the full report).

Key questions: Can the mega-combination truly achieve mega-savings? And if so, how much of those synergies will be shared with downstream customers?

A few years ago, Express Scripts, Kroger, and Supervalu formed Econdisc Contracting Solutions, a group purchasing organization for generics. Expect more cross-company buying deals as drug channels participants position for our generic future.

Posted by Drug Channels Institute, an HMP Global company on Friday, March 29, 2013

Labels: Wholesalers, Generic Drugs, Mergers and Acquisitions, Channel Management, Pharmacy

Despite the cold weather, spring has finally arrived! Let’s get ready for outside fun by staying inside and reading this bespoke selection of noteworthy Drug Channels news stories.

In this issue:

• More on WAG/ABC—Other viewpoints on the supply chain impact
• Which Way for Specialty? A valuable interview on buy-and-bill vs. white bagging
• Generic Shenanigans—How consumers see the retail pharmacy’s price war
• How Much Do You Weigh? CVS asks some personal questions

Plus, The Onion provides the patient’s perspective on weight management programs.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, March 27, 2013

Labels: Specialty Drugs, Generic Drugs, Mergers and Acquisitions, Channel Management, Pharmacy

Drug Channels is pleased to welcome CBI’s 15th Annual Medicaid and Government Pricing Congress as a new sponsor. This mega-event is being held at the Hilton Orlando Lake Buena Vista, Florida on May 14-16, 2013.

If you are involved with Medicaid or government pricing, this looks like a must-attend event. There are 50+ industry experts and 30+ sessions at this year’s conference. Check out the agenda, which features a diverse line-up of speakers from throughout the pharma industry.

You'll also hear from such government agencies as Congressional Budget Office, Department of Health & Human Services, Office of Inspector General, Office of Pharmacy Affairs, Office of the Attorney General (California), Office of the Attorney General (Texas), Oklahoma Health Care Authority, State of Florida Medicaid, Sunovian Pharmaceuticals, U.S. Department of Justice, and U.S. Public Health Service (PHS).

CBI is offering a special discount to Drug Channels readers. Register with promo code MDGPDC by Friday, March 29 and save $400 off of the standard rate. Thanks, CBI!

Posted by Drug Channels Institute, an HMP Global company on Monday, March 25, 2013

Labels: Sponsored Post