How 2017’s Fastest-Growing, Private Specialty Pharmacies Highlight an Industry Slowdown

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

The State of Specialty Pharmacy 2018: Reflections from #Asembia18 (rerun)

This week, I’m rerunning some popular posts before the Labor Day weekend. Click here to see the original post and comments from May 2018. Last week, Paula and I had the pleasure of attending Asembia’s 2018 Specialty Pharmacy Summit. The Specialty Pharmacy Summit remains the most important forum in the specialty marketplace. This year, a record 6,500 people learned, networked, and connected in Las Vegas. It was another year of record attendance. (Here’s the official press release.) Drug Channels again salutes Larry and Robert Irene for sustaining and growing an annual event that unites the entire industry. Today marks the … Continue reading The State of Specialty Pharmacy 2018: Reflections from #Asembia18 (rerun)

Profits in the 2018 Fortune 500: Manufacturers vs. Wholesalers, PBMs, and Pharmacies (rerun)

This week, I’m rerunning some popular posts before the Labor Day weekend. Click here to see the original post and comments from June 2018. Time for my 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. Our analysis also provides crucial background for understanding the Trump administration’s drug pricing blueprint. Fortune’s 2018 list contains the same seven drug channel companies that the 2017 list did: AmerisourceBergen, Cardinal Health, CVS Health, Express Scripts, McKesson, Rite Aid, and Walgreens … Continue reading Profits in the 2018 Fortune 500: Manufacturers vs. Wholesalers, PBMs, and Pharmacies (rerun)

Drug Channels News Roundup, August 2018: PBM Spread Profits, Part D Rebates, 340B Questions, Amazon and Dentists, and PBS on PBMs

We’re wrapping up one of newsiest summers in recent memory. As you send the kids back to school, savor this curated collection of curiosities, combed from the now-empty Drug Channels beach: In this issue: An Ohio audit provides unprecedented data about pharmacy benefit manager (PBM) profits New revelations about rebates in Medicare Part D. (Bonus: AHIP discovers that rebates actually exist!) Congress has tough questions for 340B contract pharmacies How Amazon Business is drilling into the dental supplies market Plus, an unexpectedly straightforward PBM news story that is clear enough to watch with your kids. P.S. Join the more than … Continue reading Drug Channels News Roundup, August 2018: PBM Spread Profits, Part D Rebates, 340B Questions, Amazon and Dentists, and PBS on PBMs

A System Without Rebates: The Drug Channels Negotiated Discounts Model

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, where PBMs and drug companies just negotiate fixed-price contracts. Such a system’s incentives, detached from artificial list prices, would likely serve patients far better.” (emphasis added) No one has yet explained what a system without rebates would look like. To facilitate the discussion, I have sketched out a possible new drug channel system that would: Respond to the … Continue reading A System Without Rebates: The Drug Channels Negotiated Discounts Model

Drug Channels News Roundup, July 2018: Amazon’s med-surg business, Naughty 340B hospitals, GoodRx pricing data, and CVS’s musical controversy

The lazy days of summer are here. Take some time off from the gross-to-net bubble and enjoy my curated collection of timely articles. This month: A must-read Q&A on Amazon’s healthcare products distribution business A new GAO study discovers that more than one in five 340B hospitals provides minimal charity and uncompensated care Fresh data from GoodRx about the crazy variability in pharmacies’ prescription prices Plus, The Wall Street Journal publishes some hard-hitting journalism about the controversial hold music played at CVS pharmacies. P.S. Join the more than 6,000 people who follow my daily musings and neat links at @DrugChannels … Continue reading Drug Channels News Roundup, July 2018: Amazon’s med-surg business, Naughty 340B hospitals, GoodRx pricing data, and CVS’s musical controversy

Specialty Pharmacies and PBMs Penetrate the 340B Program—And How Manufacturers Should Respond

In two recent Drug Channels articles, I have documented the phenomenal growth in pharmacies participating in the 340B Drug Pricing Program and the superior profits that pharmacies earn from the program. Today, I turn to the less well-known role of specialty pharmacies and pharmacy benefit managers, which are now significant participants as 340B contract pharmacies. Below, we present our first exclusive analysis of how independent and PBM-owned specialty pharmacies have deepened their relationships with hospitals and other 340B covered entities. We estimate that nearly 10% of all specialty prescriptions are dispensed by 340B contract pharmacies, which makes this channel one … Continue reading Specialty Pharmacies and PBMs Penetrate the 340B Program—And How Manufacturers Should Respond

Our Exclusive Analysis: Nearly One in Three U.S. Pharmacies Is a 340B Contract Pharmacy; Five Chains Dominate

Pharmacies continue to profit from the 340B Drug Pricing Program’s explosive growth. Our latest exclusive analysis finds that about 21,600 pharmacy locations now act as contract pharmacies for the hospitals and other healthcare providers that participate in the 340B program. The total number of locations has grown by 9% over the past 12 months. The five largest retail pharmacy chains—Walgreens, CVS, Walmart, Albertsons/Rite Aid, and Kroger—account for two-thirds of 340B contract pharmacy locations. This growth is unsurprising. The U.S. Government Accountability Office (GAO) has now documented the tremendous profits available to 340B contract pharmacies. See GAO Confirms It: 340B Hospitals … Continue reading Our Exclusive Analysis: Nearly One in Three U.S. Pharmacies Is a 340B Contract Pharmacy; Five Chains Dominate

GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients

The United States Government Accountability Office (GAO) has just issued a must-read report on the 340B Drug Pricing Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement. Some of the report’s most startling revelations confirm our worst fears about how hospitals and pharmacies are abusing the 340B program. Here are two especially dispiriting findings from the GAO’s analysis: 16 out of 28 hospitals (57%!) did not provide discounted drug prices to low-income, uninsured patients who filled prescriptions at the hospital’s 340B contract pharmacy. Seriously?!? Many 340B contract pharmacies can earn excessive profit margins of 15% to 20% from … Continue reading GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients

Amazon Buys PillPack: Six Pharmacy and Drug Channel Implications

It’s official! After more than a year of speculation and rumors, Amazon has entered the pharmacy business with its acquisition of PillPack, a small mail pharmacy. Consider this move to be the end of the beginning for the pharmacy industry’s evolution. The stock prices of pharmacies and pharmacy benefit managers (PBMs) predictably plunged yesterday as everyone freaked out. CVS Health, Walgreens Boots Alliance, and Rite Aid collectively lost more than $11 billion in stock market value. Below, I offer my initial observations on the transaction and its impact. But let’s all keep some perspective here. This is a small first … Continue reading Amazon Buys PillPack: Six Pharmacy and Drug Channel Implications