Analysis

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from June 2019.

This article foreshadowed last week’s announcement about PillPack and Blue Cross Blue Shield Of Massachusetts. More to come from Amazon, but likely less than some have projected.

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Did you miss our DRUG CHANNELS OUTLOOK: WHAT YOU NEED TO WATCH IN 2020 webinar? Click here to watch a replay of my 75-minute webinar (including the Q&A). You will also be able to download the slides.

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Last week, a judge in Rhode Island issued a decision in CVS Pharmacy, Inc. v. John Lavin. Briefly: CVS had sued Lavin, who had been a senior vice president responsible for CVS Caremark's retail network contracting. Lavin had left CVS to work for Amazon’s PillPack business. CVS successfully argued that Lavin had violated the terms of his non-compete agreement

Below, you’ll find links for the public documents in the case.

I also highlight three surprising disclosures that arose in the decision. These shed light on PillPack’s contracting strategy with payers, its not-quite-disruptive plans for pharmacy benefit management, and its alleged attempts to get retail pharmacy reimbursement rates.

We’re all expecting Jeff Bezos to pull a rabbit out of his hat, but Amazon’s disruption may be different—and take longer—than many people expect.

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from August 2019.

Don’t expect any imminent changes to this situation. My 340B outlook for 2020: Status quo + 25%.

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Did you miss our DRUG CHANNELS OUTLOOK: WHAT YOU NEED TO WATCH IN 2020 webinar? Click here to watch a replay of my 75-minute webinar (including the Q&A). You will also be able to download the slides.

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Last week, I documented how the biggest independent and PBM-owned specialty pharmacies participate as contract pharmacies within the 340B program. These specialty pharmacies are owned by CVS Health, Cigna (Express Scripts), OptumRx (UnitedHealth Group), Walgreens Boots Alliance/Prime Therapeutics, and Diplomat Pharmacy.

Today, let’s follow the prescription dollar to expose how specialty pharmacies and covered entities profit from 340B prescriptions. We rely on confidential disclosures made to the U.S. Government Accountability Office (GAO).

You’ll see the indisputable prescription math that permits large specialty pharmacies to share in the 340B discounts that covered entities earn. These pharmacies’ profits can be $1,000 per prescription—far exceeding their typical profits from dispensing a third-party-paid prescription.

No wonder PBMs and specialty pharmacies are racing to become 340B contract pharmacies!

For years, hospitals and their lobbyists have been claiming that discounts from the 340B program support care for low-income and uninsured patients. What they don’t say: These discounts are also supporting some of the largest public companies in the U.S.

CBI’s 14th Hubs and SPP Model Optimization Summit
February 24-26, 2020 | Loews Philadelphia Hotel | Philadelphia, PA
http://www.cbinet.com/Hubs

Over 1,600 leaders in Patient Access, Brand Management, Reimbursement and Specialty Distribution have benefited from CBI’s Hub and SPP Model Optimization conference series. This flagship event provides insight from key stakeholders including manufacturers, specialty pharmacies, hubs, payers, PBMs, physicians and more. Join your peers at this timely meeting as you prepare to launch, transition or reboot your corporate or product approach to hub services and hear cutting-edge advances driving an all-encompassing and state-of-the-art hub.

Visit www.cbinet.com/Hubs for more information. Drug Channels readers will save $300 off the standard registration rate when they use code SFB765*.

New Powerful Programming for 2020!

• Two Inclusive Summits:
• Compliant Patient Assistance and Programs
• Building Your Hub — Smart Launch Strategies and Leading Commercialization Frameworks
• Three In-depth Workshops:
• Access and Affordability — Copay Accumulators Impact on Patients and Manufacturers
• Specialty Pharmacy/Manufacturer Contract and Service Compliance
• Field Reimbursement Teams — Join the Mission to Overcome Patient Access Barriers through Reimbursement Support
• Three Tracks of Tailored Content:
• Leverage Specialty Data for Hub Efficiency and Value
• Hub Model Optimization to Streamline and enhance Processes
• Reimbursement and Access Considerations for Innovative Therapies

Featured Speakers include:

• Eric D. Hargan, Deputy Secretary, Department of Health and Human Services (HHS)
• Fran Castellow, MSEd, President, Operations, Patient Advocate Foundation
• Greg Shapiro, Assistant U.S. Attorney, Chief of Affirmative Civil Enforcement Unit, U.S. Attorney’s Office, District of Massachusetts
• Kelly Allison, Vice President of Patient Access, Rare Disease, Horizon Therapeutics
• Elizabeth Anderson, Vice President, Healthcare, Technology & Distribution, Evercore ISI
• Marc Appel, CEO, Orange Grove Bio
• Shannon Ashmon, MBA, Senior Manager, Oncology Access and Reimbursement, Eisai US
• Tami Carten, Executive Director, Market Access, Braeburn
• Dana Dickens, Director, Specialty Pharmacy Channel, Sobi
• Bill Goodson, Director Patient Access and Reimbursement Services, Eisai US
• Noah Holmes, Senior Director, Patient Services, Relypsa
• Casey Horton, CFE, Director, Life Sciences Governance Risk Management and Compliance, Navigant
• Kristyn Klear, Senior Manager, Access, Eisai US
• Esther Langer, Director, Trade and Distribution Operations, Sobi
• And more!

Visit www.cbinet.com/Hubs for more information. Drug Channels readers will save $300 off the standard registration rate when they use code SFB765*.

*Offer applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to an existing registration. Offer not valid on workshop only or academic/non-profit registrations.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

The largest insurers, PBMs, and specialty pharmacies have now combined into vertically-integrated organizations. As I explain below, these companies have also been rapidly integrating with healthcare providers.

I also provide an updated look at these companies and highlight strategies that they are using—or could use—to control the channel. I believe that these insurer / PBM / specialty pharmacy / provider organizations are poised to restructure U.S. drug channels by exerting greater control over patient access, sites of care/dispensing, and pricing.

If they can effectively coordinate their sprawling business operations, they will pose a substantial threat of disruption to the existing commercial strategies of pharma companies.

Will they succeed by better managing care and costs, or merely by extracting higher profits from our convoluted system?

I’ll be discussing vertical consolidation and a range of other hot topics tomorrow in my exclusive live webinar: DRUG CHANNELS OUTLOOK: WHAT YOU NEED TO WATCH IN 2020. I hope you can join me. If you register but can't make it this Friday, you'll receive a link to watch a replay.

Last week, the econowonks at the Centers for Medicare & Medicaid Services (CMS) released the 2018 National Health Expenditure (NHE) data, which measures all U.S. spending on healthcare. Links below.

Some drug spending highlights:

• For 2018, spending on outpatient prescription drugs grew by 2.5%—below the spending growth rate on hospitals, physician services, and overall national healthcare costs.

• CMS significantly lowered its previously reported drug spending figures by billions after incorporating new data on manufacturers’ rebates.

These latest CMS data also highlight why the policy debate over healthcare spending is so unbalanced. Too many people—including politicians, journalists, and a certain billionaire—have committed to a false narrative of “skyrocketing” drug spending. I must again note that demonizing pharmaceuticals as the prime driver of U.S. healthcare spending is simply wrong, as you will see below.

Unfortunately, the share and amount that Americans are forced to pay of prescription drug spending is much greater than that of other healthcare services. This circumstance derives from benefit designs, not drug prices. See what you think in our pretty charts below.

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Drug Channels Institute will host an exclusive live webinar, Drug Channels Outlook: What You Need to Watch in 2020, on Friday, December 13, 2019, from 12 p.m. to 1:00 p.m. ET. Get ready for what will certainly be another year of change for U.S. healthcare. CLICK HERE TO LEARN MORE AND SIGN UP.

If you register but can't make it this Friday, you'll receive a link to watch the replay.

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sPCMA Business Forum
March 16 & 17, 2020
Hilton Bonnet Creek | Orlando, FL
Register Today!

The sPCMA Business Forum will return to the Hilton Bonnet Creek in Orlando, FL on March 16 & 17, 2020.

Senior executives and decision makers from PBMs, health plans and their affiliate specialty pharmacies will come together at the sPCMA Business Forum to collaborate with drug and biotech manufacturers and other important business partners. The event offers invaluable networking and education for individuals and companies involved in the specialty pharmacy supply chain. Registration for the conference is now open online.


Speakers are among the specialty pharmacy industry’s top thought leaders, influencers, and executives. View highlights from last year or learn more about this conference on the sPCMA Business Forum website!

Contact PCMA

Please contact Kayla Firriolo (kfirriolo@pcmanet.org) with questions or to request further information.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Everyone wants to be a specialty pharmacy—but it’s getting harder to compete.

Consider the boom in pharmacies operated by physician practices. The growth in oral and patient self-injectable specialty drugs has encouraged physicians to dispense these products from their offices and clinics. For example, almost half of all oncology practices now dispense specialty drugs to their patients.

But as we show below, the share of oncology practices dispensing prescriptions has declined for the first time in at least six years. I suspect that we are at a turning point in the growth of physician practice dispensing.

As I explain below, this development reflects how PBMs and their plan sponsor clients are managing specialty channels.

PBMs offer financial carrots that entice plan sponsor to shift prescriptions into PBM-owned specialty pharmacies. This dynamic creates novel competitive conflicts between historically separate drug channel participants. Meanwhile, physicians are learning the perils of competing with vertically-integrated channel organizations.

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Drug Channels Institute will host an exclusive live webinar, Drug Channels Outlook: What You Need to Watch in 2020, on Friday, December 13, 2019, from 12 p.m. to 1:00 p.m. ET. Get ready for what will certainly be another year of change for U.S. healthcare. CLICK HERE TO LEARN MORE AND SIGN UP.

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Time for Drug Channels’ exclusive look at independent pharmacy owners’ business economics. For Episode XI of our annual review, we again draw upon the latest data from the National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here's the press release for the recently released 2019 edition.

Below, I update our estimates of pharmacy economics and margins. Our analysis reveals that profits per prescription in 2018 were unchanged from the 2017 figures. However, the average pharmacy in the NCPA sample filled fewer prescriptions, causing the average pharmacy owner’s salary to decline for the fifth consecutive year.

Read on for our look at pharmacy profits and my comments on the competitive dynamics of retail pharmacy. How many independents will survive? Difficult to see. Always in motion is the future.

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Drug Channels Institute will host an exclusive live webinar, Drug Channels Outlook: What You Need to Watch in 2020, on Friday, December 13, 2019, from 12 p.m. to 1:00 p.m. ET. Get ready for what will certainly be another year of change for U.S. healthcare. CLICK HERE TO LEARN MORE AND SIGN UP.

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PAP 2020 - 21st Annual Patient Assistance & Access Programs
March 23-25, 2020 | Baltimore, MD
www.cbinet.com/pap

PAP 2020, one of the nation's largest and most impactful patient access events returns to Baltimore for the 21st year! 2020 features powerful programming and compelling content designed to navigate complexities and break through barriers to ensure prescription access and affordability. Take this opportunity to exchange techniques for successful partnering, gain key industry trends in PAPs and connect personal and professional goals to accelerate success.

Visit www.cbinet.com/pap for further details and to register. Drug Channels readers from life science manufacturers will save $400 off the standard rate when they use code MZZ849 and register prior to December 27th.*

The complete agenda and faculty list will be coming soon, and features coverage on the hottest topics that matter most:

• Examine the intersection of patient access and shifts in healthcare legislation
• Identify emerging best practices and industry trends in free drug programs
• Assess the latest technology innovations to advance PAPs and drive efficiencies
• Navigate compliance risks as greater government oversight focuses on patient support and copay programs
• Explore advocate resources for better navigation of patient pathways and strategies to address medication access barriers
• Foster collaboration across stakeholders to speed patient access and manage costs
• Realize the current benefits and challenges of patient assistance from the patient perspective

KEYNOTE ANNOUNCEMENT: CBI is excited to welcome Ezekiel J. Emanuel, M.D., Ph.D., Vice Provost, Global Initiatives, the Diane v.S. Levy and Robert M. Levy University Professor, and Chair of the Department of Medical Ethics and Health Policy, University of Pennsylvania as our opening keynote speaker addressing pending health policy changes and the impact on patient affordability and access. Dr. Emanuel currently serves as a Special Advisor to the Director General of the WHO and is considered one of the leading practitioners shaping the future of healthcare, with a long record of experience at the top levels of policy including special advisor for health policy to the White House Office of Management and Budget from January 2009 to January 2011.

The conference faculty boasts 50+ presenters from Acceleron Pharma, AIDS Institute, Anne Arundel Medical Center, Avalere Health, Bausch Health, Beacon Charitable Pharmacy, Carilion Clinic, Community Volunteers in Medicine, Cystic Fibrosis Foundation, Dermira, Eisai, GSK, Health Alliance for the Uninsured, HealthWell Foundation, J&J, LEO Pharma, Leukemia & Lymphoma Society, McKesson Pharmacy, MorphoSys US Inc, National Health Council, National Multiple Sclerosis Society, PAN Foundation, Patient Advocate Foundation, Pfizer, Rigel Pharmaceuticals, Sidley Austin LLP, SK Life Science Inc, Sobi, The National Association of Free & Charitable Clinics, Thomas Jefferson University Hospital, UC Health, UCB, UnityPoint Health, Vanderbilt University Medical Center, Virginia Health Care Foundation and many more.

Visit www.cbinet.com/pap for further details and to register. Drug Channels readers from life science manufacturers will save $400 off the standard rate when they use code MZZ849 and register prior to December 27th.*

CBI will see you there!

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates, clinic/hospital rates, non-profit rates other offers. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

CBI’s Patient Registries, Real World Evidence and HEOR
January 27-28, 2020 | Miami, FL
www.cbinet.com/RWE

Kick off 2020 in Miami at the Patient Registries, Real World Evidence and HEOR Summit! Come together with colleagues from across the industry to discuss the latest innovations and best practices for collecting, analyzing and utilizing patient data.

Visit www.cbinet.com/RWE for further details and to register. Drug Channels readers will save $300 off the standard rate when they use code ZUS222 and register prior to December 13, 2019.*

With three dedicated tracks – Patient Registries, RWE and HEOR – the conference focuses on common goals for participants centered on using data to improve treatment and outcomes. Sign up to see the agenda here.

Experts from Jazz Pharmaceuticals, AHRQ, Pfizer, Alexion Pharmaceuticals, Amicus Therapeutics, Novartis, NORD, EMD Serono, Biogen, Global Healthy Living Foundation, AstraZeneca, Stamford Health, Ferring Pharmaceuticals, Global Genes, Geisinger, BeiGene, Takeda Canada, Bridge the Gap - SYNGAP Education and Research Foundation and more will lead robust discussions on topics such as:

• The Evolving Industry Landscape and the Role of Real World Evidence in Optimizing Market Access and Patient Outcomes
• Getting to High-Quality Real-World Data and Applying it to RWE
• Navigate Health Data Governance to Improve Treatments and Outcomes
• Bringing Data Back to Patients — Empowering Patients through Data Sharing
• Global Perspective and Outlook on Registries and RWE
• Emerging Ethical and Compliance Issues in RWD-Driven Research
• Harmonization of Outcomes Measures for More Patient-Centric Care
• Leverage Machine Learning and New Technologies to Enhance RWE Generation and Outcomes Research
• And much more!

Visit www.cbinet.com/RWE for further details and to register. Drug Channels readers will save $300 off the standard rate when they use code ZUS222 and register prior to December 13, 2019.*

CBI will see you there!

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rate or non-profit rates. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.