Oral generic drugs keep getting cheaper. The Food & Drug Administration (FDA) has intensified the generic industry’s competitive pressures with record drug approvals. The FDA’s actions, combined with the negotiating leverage of the large generic purchasing organizations, led to 2018’s persistent double-digit deflation in manufacturers’ selling prices for oral generic drugs. Below, we update our analysis of these generic drug mega-buyers. We estimate that for 2018, the three largest buyers accounted for more than 90% of total U.S. generic drug purchases from manufacturers. In 2019, acquisitions and contract switches will shift market share among these groups, but not diminish their … Continue reading The Big Three Generic Drug Mega-Buyers Drove Double-Digit Deflation in 2018. Stability ahead?
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
This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from August 2018. This has been the most impactful article that I have ever published on Drug Channels. Review it and get ready for 2019. P.S. You can also find this material at www.WorldWithoutRebates.com. (Yes, we bought that domain!) 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, … Continue reading A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)
This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from July 2018. Expect 340B to stay in the news during 2019. Unfortunately, a sensible, bipartisan legislative fix still seems unlikely. 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: … Continue reading GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients (rerun)
Modern Distribution Management recently published my article 2018 MDM Market Leaders | Top Pharmaceuticals Distributors. It is an excerpt from our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Below, I republish the section of the article highlighting five significant industry trends affecting the U.S. drug wholesaling industry. I think Drug Channels readers will enjoy this summary as we look toward 2019. Click here to download a free overview of the full 2018-19 report. P.S. I’ll be discussing these and other topics next week in my keynote address at CBI’s 14th Life Sciences Trade and Channel Strategies. Hope to see … Continue reading Five Industry Trends for U.S. Drug Wholesalers in 2019
Last week, the Centers for Medicare & Medicaid Services (CMS) released a new rule for Medicare Parts B and D. It proposes changes to protected classes, e-prescribing, and other issues. Links and background below. Notably for the Drug Channels audience, CMS also announced that it is considering—but not yet formally proposing—changes to how pharmacy price concessions are handled within Medicare Part D. These payments currently function like pharmacy rebates to Part D plans. They are therefore considered to be direct and indirect remuneration (DIR) and often called “DIR fees.” Thanks to new CMS disclosures, we can now see why pharmacy … Continue reading CMS Considers Point-of-Sale Pharmacy DIR: Another Prelude to a World Without Rebates?
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: Amazon starts to expand PillPack’s dispensing capabilities Blue Cross Blue Shield misrepresents drug spending data An excellent analysis of the CMS proposal for advertising drug list prices The patient’s perspective on choosing a Medicare Part D plan Plus, please consider making a donation to the Dan Best Memorial Fund. Details below. P.S. For daily updates on stuff that I am reading, join the more than 6,500 people who follow … Continue reading Drug Channels News Roundup, November 2018: Amazon/PillPack Update, Fake News from BCBSA, Drug List Prices in Ads, Part D Plans, and Dan Best
Time to update our exclusive annual analysis of pharmacist salaries. We again rely on the latest Occupational Employment Statistics (OES) data from the Bureau of Labor Statistics (BLS). For 2017, the average gross base salary for a pharmacist at a retail, mail, long-term care, and specialty pharmacy reached nearly $122,000—up slightly from the 2016 figure. Meanwhile, the share of pharmacists who work at hospitals reached a new high. Pharmacists who work at hospitals also had higher salaries and greater salary increases than those of pharmacists in outpatient dispensing formats. Some people have predicted doom and gloom for pharmacists. These latest … Continue reading Pharmacist Salaries Keep Rising: Hospitals Continue to Lead in Wage and Employment Growth
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)
Boo! Time for my Halloween bag of Drug Channels news stories. This issue’s tricks and treats: Shocking! The gross-to-net bubble for Amgen’s PCSK9 product magically vanishes—and my $0.02 appears Creepy! Stefano Pessina of Walgreens Boots Alliance shares startling thoughts about Amazon, ABC, and more Scary! Shareholders vote today on whether Rite Aid should amputate its PBM Spooky! The Wall Street Journal conjures up a frightfully funny editorial about the drug channel Plus, the Centers for Medicare & Medicaid Services summons Buy-and-Bill Murray for its latest foray into Part B reform. P.S. Join the zombie horde who shamble after me at … Continue reading Drug Channels News Roundup, October 2018: Amgen, Walgreens, Rite Aid’s PBM, Drug Price Ads, and Buy-and-Bill Murray