Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Time to dive into our 12th (!) annual review of the Fortune 500 list. Every year, this is one of my most popular posts, because it helps us follow the dollar and understand how drug channel intermediaries make money. Fortune’s 2019 list contains only six drug channel companies: AmerisourceBergen, Cardinal Health, CVS Health, McKesson, Rite Aid, and Walgreens Boots Alliance. Consolidation and vertical integration have transformed the channel—and the Fortune rankings. Below you will see our list of the companies that disappeared from the roster. We therefore have added to our analysis the four managed care and insurance companies on … Continue reading Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Drug Channels News Roundup, April 2019: Cigna’s Insulin Program, Amazon’s PillPack Moves, Magellan’s Biosimilar Success, Prime’s Formulary Exclusions, and a World Without Rebates

April is over, and now, come what May, it’s time for our monthly roundup of news stories highlighting key trends for U.S. drug channels. In this issue: My $0.02 on the Cigna/Express Scripts’ $25 insulin program Amazon starts marketing PillPack to Prime customers Surprise! Magellan drives major biosimilar adoption. Prime Therapeutics shows the power of formulary exclusion Plus, read media coverage of our recent webinar: Preparing for a World Without Rebates. P.S. Join the more than 7,400 people who follow my daily updates and links to neat stuff at @DrugChannels on Twitter. Read more » Copyright © 2006-2019 Pembroke Consulting, … Continue reading Drug Channels News Roundup, April 2019: Cigna’s Insulin Program, Amazon’s PillPack Moves, Magellan’s Biosimilar Success, Prime’s Formulary Exclusions, and a World Without Rebates

The Top 15 Specialty Pharmacies of 2018: PBMs Keep Winning

In Drug Channel Institute’s list of the top 15 pharmacies of 2018, we show that many of the largest U.S. pharmacies are now central-fill mail and specialty pharmacies operated by PBMs and insurers. To complement that broader list, below you’ll find the Drug Channels Institute list of the top 15 pharmacies based on specialty drug dispensing revenues. As you will see, PBMs and insurers dominate specialty drug dispensing channels. The top four companies—all of which are fully or partly owned by a PBM—accounted for more than 70% of prescription revenues from pharmacy-dispensed specialty drugs. Payer- and PBM-owned specialty pharmacies’ market … Continue reading The Top 15 Specialty Pharmacies of 2018: PBMs Keep Winning

A World Without Rebates: Predictions for How the Channel Will Evolve and Why Drug Prices Will Go Down

Two years ago on Drug Channels, I wrote about a shift from rebates to discounts as a black swan event—a massively important yet unexpected break from current practice. Given recent developments, I believe that we are moving ever closer to a world without rebates. Yet there are many unanswered questions were such a radical shift to occur. As I see it, a world without rebates would force manufacturers to use net price as a competitive weapon. If PBMs and payers behave logically, then drug prices would drop as manufacturers are forced to compete more aggressively for prescriptions. These conclusions are … Continue reading A World Without Rebates: Predictions for How the Channel Will Evolve and Why Drug Prices Will Go Down

Employers Are Absorbing Even More Manufacturer Rebates from Their PBMs

The likelihood of a radical restructuring of the U.S. drug channel has never been greater. A serious effort exists to remove or decrease the role of rebates. Today, we shed light on one crucial aspect of the current rebate system: how employer-sponsored health plans access the billions of dollars in manufacturer rebates that are negotiated by their pharmacy benefit managers (PBMs). For this analysis, we rely on the Pharmacy Benefit Management Institute’s (PBMI) excellent new reports. As you will see, employers are receiving an increasing share of the rebate money collected by pharmacy benefit managers. However, employers’ rebate agreements with … Continue reading Employers Are Absorbing Even More Manufacturer Rebates from Their PBMs

NEW: The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

I am pleased to announce our new 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, available for purchase and immediate download. Click here to download a free report overview (including the Table of Contents and a List of Exhibits) New Drug Channels Institute Study Analyzes U.S. Drug Pricing and Rebates, Predicts Further Shakeout and Consolidation (press release) We’re offering special discounted pricing if you order before March 22, 2019! The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers is the only resource of its kind available anywhere. With 180 proprietary charts, exhibits, and data tables, the … Continue reading NEW: The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

The Top 15 U.S. Pharmacies of 2018: M&A Reshapes the Market

Next week, Drug Channels Institute will release our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the tenth edition of our popular and comprehensive examination of the entire drug pricing, reimbursement, and dispensing system. The exhibit below—one of 180 in our new report—provides a first look at the 15 largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2018. As you will see, vertical and horizontal mergers and acquisitions are reshaping the pharmacy and PBM industries—and enabling the big to get even bigger. I highlight some of the major transactions that affected our ranking. … Continue reading The Top 15 U.S. Pharmacies of 2018: M&A Reshapes the Market

Preorder Now: Our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

On March 5, 2019, Drug Channels Institute will release The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. This new tenth edition is the most comprehensive, fact-based tool for understanding the entire U.S. drug pricing and distribution system. The 2019 edition has been significantly expanded and restructured since last year’s edition. We have added new industry data sources, deepened our coverage of many topics, and added more trending information. There are also 2 new chapters and many new exhibits. CLICK HERE to download a free pre-publication draft overview (including the Table of Contents and a List of Exhibits). … Continue reading Preorder Now: Our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from August 2018. This has been the most impactful article that I have ever published on Drug Channels. Review it and get ready for 2019. P.S. You can also find this material at www.WorldWithoutRebates.com. (Yes, we bought that domain!) Are you ready for a world without rebates? In June, Alex Azar, Secretary of the U.S. Department of Health & Human Services (HHS), summarized his long-range vision for a new drug channel system: “[W]e may need to move toward a system without rebates, … Continue reading A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)

Building a New Drug Wholesaler Compensation Model: What Happens as Brand Inflation Slows? (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from July 2018. The challenges facing wholesalers have intensified since this article was originally published, in July. Brand-name drug inflation will likely reach historical lows in 2019, and the prospects for a gross-to-net bubble reset are greater than ever. Have executives at the Big Three companies fully grasped the changes coming to the drug wholesaling business model? For more on the industry, see our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Today, drug wholesalers make money from distribution in … Continue reading Building a New Drug Wholesaler Compensation Model: What Happens as Brand Inflation Slows? (rerun)