Last week, CVS Health held its annual investor day. (Links below.) In the aftermath of the Aetna transaction, CVS Health has become a uniquely diverse organization with revenues exceeding $250 billion. As expected, CVS Health management explained the cost-cutting synergies that it expects from having united CVS Health and Aetna. It also laid out a long-range vision for generating value—and operating income—from making the disparate pieces of its empire work together in new ways. CVS Health called these new products and services “transformational initiatives.” Below, I summarize investor day high points concerning CVS Health’s overall strategy, offer thoughts on the … Continue reading CVS Health: Will This Giant’s Scale and Scope Confound Its Vision for Healthcare?
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
Summer is unofficially here! Before you break out the grill, check out these officially noteworthy items: Why did Express Scripts launch a GPO … in Switzerland? Behind the scenes of Amazon’s deal for PillPack More on BS in healthcare Plus, a fun video recap from Asembia’s 2019 Specialty Pharmacy Summit—including some footage of your friendly neighborhood blogger! P.S. Follow my daily musings and links to neat stuff at @DrugChannels on Twitter. Read more » Copyright © 2006-2019 Pembroke Consulting, Inc. d/b/a Drug Channels Institute. Drug Channels® is a registered trademark of Pembroke Consulting, Inc. This Feed is for personal non-commercial … Continue reading Drug Channels News Roundup, May 2019: Express Scripts’ New GPO, More on Amazon/PillPack, a BS Update, and Vegas Video
This week, I’m rerunning some popular posts while I attend Asembia’s 2019 Specialty Pharmacy Summit. Click here to see the original post and comments from January 2019. Let’s kick off 2019 with a quick review of last year’s specialty pharmacy mergers and acquisitions (M&A). Our list (below) includes only deals that were publicly announced in 2018. Pharmacy benefit managers (PBMs) were especially busy. CVS Health bought five specialty pharmacies. UnitedHealth’s OptumRx bought Avella Specialty Pharmacy, the largest independent specialty pharmacy. Diplomat Pharmacy was uncharacteristically quiet during 2018, though it had been one of the most active acquirers in previous years. … Continue reading Specialty Pharmacy M&A: Our Look at 2018’s Deals (rerun)
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
Let’s kick off 2019 with a quick review of last year’s specialty pharmacy mergers and acquisitions (M&A). Our list (below) includes only deals that were publicly announced in 2018. Pharmacy benefit managers (PBMs) were especially busy. CVS Health bought five specialty pharmacies. UnitedHealth’s OptumRx bought Avella Specialty Pharmacy, the largest independent specialty pharmacy. Diplomat Pharmacy was uncharacteristically quiet during 2018, though it had been one of the most active acquirers in previous years. The specialty pharmacy industry is rapidly maturing, so I expect many more exits in the coming years. Looking to pick up a fast-growing specialty pharmacy? Click here … Continue reading Specialty Pharmacy M&A: Our Look at 2018’s Deals
The evolving specialty market has just claimed another victim. Cardinal Health is selling its specialty pharmacy to BioMatrix Specialty Pharmacy LLC, a private-equity-backed company. There was no public announcement, so today’s article counts as another Drug Channels exclusive. Below, I provide background about BioMatrix and the specialty pharmacies that wholesalers operate. Cardinal’s capitulation highlights the challenges for smaller specialty pharmacies. Cardinal operates a small, sub-scale specialty pharmacy that has had difficulty attracting patients. What’s more, Cardinal’s overall size as a $137 billion business couldn’t help its pharmacy gain sufficient access to manufacturers’ and payers’ limited networks. Each of the Big … Continue reading Surprise Deal: Cardinal Health Sells Its Specialty Pharmacy (Again)
Let’s check in with poor ol’ Rite Aid, the little drugstore that couldn’t. Over the past year and half, Rite Aid has sold off 2,000 stores to Walgreens Boots Alliance, scuttled a proposed merger with Albertsons, and watched its stock price drop from nearly $9 to about $1. Yikes. Rite Aid’s EnvisionRx business, which includes two small PBMs and some related pharmacy services businesses, still has some value. But as you will see below, there appear to be few synergies between Rite Aid’s pharmacy business and the Envision PBMs. Investors are grumbling that Rite Aid should sell EnvisionRx before things … Continue reading Does Rite Aid Have the Grit to Succeed With Its EnvisionRx PBM Business?
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
Time for our annual review of the Inc. 5000 list, the magazine’s annual ranking of the fastest-growing private companies in the United States. The list offers a valuable snapshot of the dynamic specialty pharmacy industry. This marks our sixth annual review of the list. We have identified nine specialty pharmacies on the 2018 list, which is based upon revenue growth from 2014 to 2017. Annual revenues range from $61.3 million to $1.4 billion. The companies on the list are larger but growing more slowly than those in our previous analyses. The pharmacies and key stats are listed below. For the … Continue reading How 2017’s Fastest-Growing, Private Specialty Pharmacies Highlight an Industry Slowdown