Five Takeaways About Cigna’s Strategy for Express Scripts

Almost three weeks ago, the health insurer Cigna announced that it would acquire the pharmacy benefit manager (PBM) Express Scripts. Click here to read my initial analysis of the deal. Wall Street remains unimpressed. Ever since the transaction was announced, Cigna’s stock price has dropped by 16%. Meanwhile, Express Scripts’ stock is trading more than 20% below Cigna’s offer price, suggesting that many believe the deal won’t be completed. To soothe rattled investors, Cigna last week filed an intriguing SEC Form 425. It contains 31 questions that you may or may not have been asking yourself about its acquisition of … Continue reading Five Takeaways About Cigna’s Strategy for Express Scripts

Cigna-Express Scripts: Vertical Integration and PBMs’ Medical-Pharmacy Future

Wow. Yesterday, Cigna announced that it would acquire Express Scripts. See the links below. Though Cigna was an unexpected acquirer, the deal confirms the importance of pharmacy and medical benefit integration. It also reinforces the role that pharmacy benefit management (PBM) plays in the drug channel. PBMs are now linked closely to the expensive specialty drugs that treat smaller patient populations, not to the primary care blockbusters of yesteryear. The strategic logic, however, is much more compelling for Express Scripts than it is for Cigna. Perhaps that’s why the stocks reacted so differently yesterday. Express Scripts’ stock closed up 9%, … Continue reading Cigna-Express Scripts: Vertical Integration and PBMs’ Medical-Pharmacy Future

As CVS-Aetna Looms, Retail Pharmacy Clinic Growth Stalls

Last week, the Senate Judiciary Committee held an uneventful hearing on the CVS-Aetna merger. The lack of fireworks suggests that the deal is on track for approval later this year. Click here to read the testimony. Below, I review 2017 clinic developments for the largest retail chains: CVS, Walgreens, Kroger, Target, Walmart, and Rite Aid. Despite the hype, there was little advancement in retail health at pharmacy locations. For the third consecutive year, the total number of retail clinics has remained essentially flat, at about 2,000 nationwide. CVS Health’s comments at last week’s hearing (highlighted below) would represent a major … Continue reading As CVS-Aetna Looms, Retail Pharmacy Clinic Growth Stalls

Drug Channels News Roundup, February 2018: Walgreens Boots Alliance + AmerisourceBergen, Copay Coupons, and Amazon

Winter—or at least February—is almost over! Bid farewell to the shortest month of the year with this curated selection of noteworthy news. In this issue: A few thoughts on a Walgreens Boots Alliance-AmerisourceBergen deal Watch a fun panel discussion on copay coupons The latest on Amazon’s ambitions for medical products Plus, The Onion provides an additional update on Amazon’s healthcare plans. P.S. For my daily updates on news and neat reports, follow @DrugChannels on Twitter. My recent tweets have covered copay accumulators, Medicare Part D, the 340B program, M&A rumors, healthcare economics, and more. Read more » Copyright © 2006-2018 … Continue reading Drug Channels News Roundup, February 2018: Walgreens Boots Alliance + AmerisourceBergen, Copay Coupons, and Amazon

The CVS-Aetna Deal: Five Industry and Drug Channel Implications

Surprise? CVS Health and Aetna announced their long-rumored merger. Relevant links below. This transaction will create a healthcare organization with significant market share in the pharmacy, pharmacy benefit management (PBM), and health insurance businesses. There could be many potential opportunities for new consumer-oriented offerings. Finding the consumer value in this multi-headed $221 billion behemoth will be a major challenge. Read on for my initial thoughts on the deal and what it means for PBMs, manufacturers, and pharmacies. I also highlight some of the implementation challenges. Feel free to add your own thoughts on this mega-deal in the comments below. (Yes, … Continue reading The CVS-Aetna Deal: Five Industry and Drug Channel Implications

Why CVS Health and Express Scripts Sold—and McKesson Bought—a Specialty Hub Business

ICYMI: In early November, McKesson paid CVS Health $735 million for the RxCrossroads patient services hub business. A few weeks later, Express Scripts sold its United BioSource Corporation (UBC) hub business to a private equity firm. These intriguing transactions make sense for all of these key drug channel players. CVS Health and Express Scripts divest businesses that could be perceived to conflict with their pharmacy benefit manager (PBM) business. McKesson deepens its investment in non-wholesaling manufacturer services for specialty products. Below, I review the market landscape for hub service providers and explain the business issues that motivated the two PBMs … Continue reading Why CVS Health and Express Scripts Sold—and McKesson Bought—a Specialty Hub Business

Drug Channels News Roundup, September 2017: A Walgreens-Rite Aid Deal Postmortem, Impax Likes Amazon, Health Insurance History, and Gross-to-Net Bubble Emojis

Autumn is here! Curl up with your favorite pumpkin spiced blog and savor these stories plucked from the Drug Channels patch: Stefano Pessina of Walgreens Boots Alliance reflects on the successful Rite Aid deal A generic drug maker speculates on using Amazon as a direct-to-patient channel A great history lesson on why the U.S. has employer-sponsored insurance Plus, the Pharmaceutical Research and Manufacturers of America (PhRMA) attacks pharmacy benefit managers (PBMs)…with emojis! P.S. For my daily cornucopia of interesting news stories, follow @DrugChannels on Twitter. Read more » Copyright © 2006-2017 Pembroke Consulting, Inc. and Copyright © 2006-2017 Drug Channels. … Continue reading Drug Channels News Roundup, September 2017: A Walgreens-Rite Aid Deal Postmortem, Impax Likes Amazon, Health Insurance History, and Gross-to-Net Bubble Emojis

What’s Behind the Slowdown in Specialty Pharmacy M&A Deals?

It looks like specialty pharmacy merger & acquisition (M&A) activity has slowed down. In 2017 so far, only seven deals involving specialty pharmacies and infusion services companies have been announced. Each is listed below, along with the 10-year M&A trends. What’s going on? Are buyers skittish over slower specialty industry revenue growth? Are they nervous about the still-unsettled impact of Direct & Indirect Remuneration (DIR) fees? Are the big dealmakers on the sidelines, digesting their previous purchases? Or will we see a surge of deals before year’s end? Read more » Copyright © 2006-2017 Pembroke Consulting, Inc. and Copyright © … Continue reading What’s Behind the Slowdown in Specialty Pharmacy M&A Deals?

2016’s Fastest-Growing, Private Specialty Pharmacies (From the Inc. 5000)

Time for our annual review of the latest 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 15 specialty pharmacies on the 2017 list, which is based upon revenue growth from 2013 to 2016. Annual revenues range from $6.4 million to $1.3 billion. The pharmacies and key stats are listed below. For the nine companies returning from last year’s list, median revenues in 2016 sped ahead by 24%—impressive but … Continue reading 2016’s Fastest-Growing, Private Specialty Pharmacies (From the Inc. 5000)

Drug Channels News Roundup, August 2017: Amazon, Express Scripts, Walgreens, PharMerica, Rebates, and Bezos Business Wisdom

The eclipse has passed! Now it’s time to enjoy this blinding collection of curious questions, filtered through the all-seeing Drug Channels viewfinder. What are Amazon’s actual prospects in the drug channel? What does Express Scripts think about Amazon’s prospects? Why did Walgreens partner with KKR to buy PharMerica? What happens to patients when plans favor brand-name drugs over generics? Plus, Jeff Bezos shares words of wisdom for budding entrepreneurs. P.S. If everything under the sun is in tune, then you’ll follow @DrugChannels on Twitter for my daily links to all that you love. Read more » Copyright © 2006-2017 Pembroke … Continue reading Drug Channels News Roundup, August 2017: Amazon, Express Scripts, Walgreens, PharMerica, Rebates, and Bezos Business Wisdom