The Cigna-Express Scripts Deal’s Intriguing Connections With—And Implications For—AmerisourceBergen and Walgreens

Almost there! Last week, the U.S. Department of Justice (DOJ) Antitrust Division closed its investigation of Cigna’s proposed acquisition of Express Scripts. Click here to read the DOJ’s closing statement. As with everything in the U.S. drug channel, there’s more to this transaction than meets the eye. Below, I explain how the transaction will benefit AmerisourceBergen (ABC), which supplies the mail and specialty pharmacies of Express Scripts. But as you’ll see, Express Scripts has been relying less on ABC as a source of supply for its mail and specialty pharmacies. Meanwhile, the new organization transaction will have few degrees of … Continue reading The Cigna-Express Scripts Deal’s Intriguing Connections With—And Implications For—AmerisourceBergen and Walgreens

Meet The Power Buyers Driving Generic Drug Deflation (rerun)

This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from February 2018. Wholesalers and retailers have deepened their relationships via generic purchasing consortia—and generic drug makers are feeling the pain. Example: Novartis’ Sandoz business unit reported that its fourth-quarter 2017 sales dropped by 17% “due to increased industry-wide pricing pressure and continued customer consolidation.” (source) Below, we examine the four generic drug mega-buyers behind this pressure: Red Oak, Walgreens Boots Alliance, McKesson and ClarusOne, and Express Script’s EconDisc. We estimate that in 2017, these four organizations accounted for an … Continue reading Meet The Power Buyers Driving Generic Drug Deflation (rerun)

Meet The Power Buyers Driving Generic Drug Deflation

Wholesalers and retailers have deepened their relationships via generic purchasing consortia—and generic drug makers are feeling the pain. Example: Novartis’ Sandoz business unit reported that its fourth-quarter 2017 sales dropped by 17% “due to increased industry-wide pricing pressure and continued customer consolidation.” (source) Below, we examine the four generic drug mega-buyers behind this pressure: Red Oak, Walgreens Boots Alliance, McKesson and ClarusOne, and Express Script’s EconDisc. We estimate that in 2017, these four organizations accounted for an astounding 90% of total U.S. generic drug purchases from manufacturers. Read on for our market share estimates, business profiles, and the outlook for … Continue reading Meet The Power Buyers Driving Generic Drug Deflation

Drug Channels News Roundup, November 2017: Amazon’s Updated Plans, Premier’s Push-Back, Diplomat’s PBMs, and My $0.02 on Alex Azar

Hope you enjoyed the Thanksgiving holiday! I remain ever-thankful for your support and readership. Now that you’ve stretched your stomach, stretch your mind with some food for thought. In this issue: ICYMI: Actually, Amazon will not distribute drugs (for now) Premier tries to preempt worries about Amazon and GPOs Have you heard? Diplomat bought two PBMs Plus, I share some thoughts on Alex Azar, nominee to head the Department of Health and Human Services. P.S. Follow my daily musings and links to neat stuff at @DrugChannels on Twitter. Read more » Copyright © 2006-2017 Pembroke Consulting, Inc. and Copyright © … Continue reading Drug Channels News Roundup, November 2017: Amazon’s Updated Plans, Premier’s Push-Back, Diplomat’s PBMs, and My $0.02 on Alex Azar

Cardinal Health’s Unhappy Profit Surprise: The Coevolution of Pharmacy Buying Groups and Wholesaler Economics (rerun)

This week, I’m rerunning some popular posts while I’m on vacation. Click here to see the original post and comments from April 2017. Yesterday probably didn’t turn out as well as Cardinal Health had expected. The good news: The company announced the acquisition of Medtronic’s Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency businesses for $6.1 billion in cash. The bad news: Cardinal sharply lowered its outlook for future profits from its pharmaceutical distribution business. The company cited lower generic drugs prices and “sell-side” pressure from pharmacy customers as two primary causes of its financial woes. Wall Street was unhappy: … Continue reading Cardinal Health’s Unhappy Profit Surprise: The Coevolution of Pharmacy Buying Groups and Wholesaler Economics (rerun)