Why Retail Pharmacies Still Overcharge Uninsured Patients—And What That Means for Amazon

Consumer Reports recently published a fascinating survey of pharmacies’ cash prices for five common generic drug prescriptions. The results were startling. Prescription prices ranged from $66 to $1,351—a nearly 2,000% difference. The big three retail drugstore chains—CVS, Walgreens, and Rite Aid—consistently had higher average prices compared with those of other pharmacies. Independent pharmacies had some of the lowest prices, but also some of the highest prices. Our analysis of prescription profits highlights the pharmacy industry’s unfortunate pricing strategy for cash-pay prescriptions. Average profit margins ranged from $8 to $264 per prescription for the five drugs. We can only hope that … Continue reading Why Retail Pharmacies Still Overcharge Uninsured Patients—And What That Means for Amazon

McKesson Leads Another Round of PSAO Consolidation

Last week, McKesson announced the formation of Health Mart Atlas (HMA), a joint venture between McKesson’s Access Health business and American Pharmacy Network Solutions (APNS). Click here to read the press release. The combination extends McKesson’s position as the largest pharmacy services administrative organization (PSAO). PSAOs are the awkwardly named intermediaries that operate between smaller pharmacies and pharmacy benefit managers (PBMs), per our U.S. Distribution and Reimbursement System flowchart. When the Arete Pharmacy Network was formed, in 2016, I predicted that the fragmented PSAO sector would begin a long-overdue consolidation. Given the PBM titans now sitting atop Mt. Olympus, the … Continue reading McKesson Leads Another Round of PSAO Consolidation

EXCLUSIVE: A Record Number of Specialty Pharmacies Now Have Accreditation

It’s time for Drug Channels Institute’s annual update on the accreditation of specialty pharmacies. Our spooky research team (pictured at right) is back! We have counted every pharmacy location that has achieved accreditation by an independent organization. Our exclusive findings: The number of specialty pharmacies with accreditation expanded again in 2017. We identified 729 unique pharmacy locations that by the end of 2017 had achieved accreditation from the three major independent accreditation organizations. The 2017 figure is almost double the 2015 figure. For the second consecutive year, pharmacy locations owned by healthcare providers—such as hospitals, health systems, physician practices, and … Continue reading EXCLUSIVE: A Record Number of Specialty Pharmacies Now Have Accreditation

Plan Sponsors Prefer Specialty Pharmacies Over Retail Drugstores

Top ‘o the morning to you! Let’s take a wee look at the Pharmacy Benefit Management Institute’s (PBMI) new 2018 Trends in Specialty Drug Benefits. (Free download with registration.) It’s a great resource for understanding how plan sponsors manage specialty drugs. The new report contains fascinating data showing how sponsors of employer-based health plans view dispensing channels for specialty drugs. As you will see below, employers believe that the capabilities of specialty pharmacies are superior to those of retail pharmacies. They also think that over the past few years, specialty pharmacies’ performance gap has widened for crucial clinical and patient … Continue reading Plan Sponsors Prefer Specialty Pharmacies Over Retail Drugstores

The Top 15 Specialty Pharmacies of 2017: PBMs and Payers Still Dominate

Below is our exclusive Drug Channels Institute list of the 15 largest pharmacies, ranked by estimated 2017 revenues from dispensing specialty pharmaceuticals. The battle for control of the specialty market accelerated in 2017, though pharmacies owned by pharmacy benefit managers (PBMs) continued to capture most of the market share. The top four specialty pharmacies are all owned or co-owned by a PBM. They accounted for about two-thirds of prescription revenues from pharmacy-dispensed specialty drugs. Vertical integration M&A has been in the news. But as our data shows, the integration of PBMs and specialty pharmacies has already happened. Read more » … Continue reading The Top 15 Specialty Pharmacies of 2017: PBMs and Payers Still Dominate

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

NEW: The 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

I am pleased to announce our new our 2018 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) Click here to read the press release We’re offering special discounted pricing if you order before March 10, 2018! The 2018 edition has been thoroughly updated, revised, and expanded. This latest edition contains the most current financial and industry data along with information about the strategies and market positions of the largest companies. Many sections and chapters have … Continue reading NEW: The 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

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 Top 15 U.S. Pharmacies of 2017: Market Shares and Key Developments For The Biggest Companies

Next week, Drug Channels Institute will release our 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the ninth edition of our popular examination of the U.S. pharmacy distribution and reimbursement system. The exhibit below—one of 160 in our new report—provides a first look at the 15 largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2017. I also highlight crucial market changes that affected our ranking. As you will see, the big got bigger in 2017. For a sneak peek at the complete report, download the free overview. If you would like to preorder … Continue reading The Top 15 U.S. Pharmacies of 2017: Market Shares and Key Developments For The Biggest Companies

A Lesson from McKesson: How Specialty Pharmacy Growth Is Hurting Wholesalers

Last week, McKesson released its quarterly earnings for the fourth calendar quarter of 2017. See the links below. The profit outlook for its distribution business was lower than Wall Street’s expectations, due partly to what management termed “customer and product mix.” Below, I offer my take on the three interrelated mix changes that challenge wholesalers’ profits from the growth of specialty pharmacy drugs. Wholesalers have been trying to alter their conventional pricing and contracting approaches to address these pressures, though it’s not clear how successful these efforts have been. The specialty boom may prove to be a mixed blessing for … Continue reading A Lesson from McKesson: How Specialty Pharmacy Growth Is Hurting Wholesalers