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 brand-name 340B prescriptions. As I have long suspected, large, publicly-traded pharmacies are sharing in the 340B discounts generated for covered entities.

Bottom line: Hospitals and pharmacies are making money from poor people. Are you kidding me?!? For shame!

The 340B program’s apologists will have a hard time rebutting the uncomfortable facts from this GAO report. Calling something a “drug discount program” apparently doesn’t mean that the neediest patients get access to those discounts. Read on, and prepare to be outraged.

P.S. In two upcoming articles about 340B, I’ll review the pharmacies participating in the program and then examine the role of specialty pharmacies and pharmacy benefit managers.

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2nd Annual Pharma Digital Marketing & Multichannel Integration Summit

September 13-14, 2018 | Boston, MA

www.worldcongress.com/digitalmarketing

Join industry innovators at the 2nd Annual Pharma Digital Marketing & Multichannel Integration Summit, September 13-14, in Boston, MA as they share how to deliver information to customers in a way that is tailored to them, through their preferred channels. The agenda is structured to provide solutions to common problems felt by today’s pharma marketers and empower attendees to return to the office with innovative strategies and tangible takeaways to enhance the customer experience and drive business results.

Key Topics in 2018 include:

• Applying innovative technologies such as virtual reality (VR) and augmented reality (AR) to your marketing campaign
• What the pharma industry can learn from Amazon’s marketing tactics
• Building a data-driven marketing strategy
• Utilizing digital health to transform patient care
• Evolving your organization’s culture to transform the customer experience.

The expert speaker faculty includes representatives from:

Amazon Web Services, AZ, GSK, Merck, Novartis, WEGO Health, eHealth Initiative, BMS, Lilly, and many more!

Register with discount code DC200 and save $200 on rates.

The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

        

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I can’t recall any period in my life when our country has been so divided and polarized.

So just in time for our nation’s birthday, I’m happy to report some good news. When it comes to healthcare analysis, both Republicans and Democrats can agree on one thing: Drug Channels is the go-to source!

Each political party’s major drug pricing policy document draws prominently from our research and writing. See below for the patriotic details of this historic bipartisan validation.

Through the Drug Channels Institute, I strive to provide you with fact-based and balanced coverage. I’m proud that your friendly neighborhood blogger can be a unifying force for our troubled nation.

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CBI’s 4th Annual Compliance Congress for Specialty Products

September 13-14, 2018 | Boston, MA

www.cbinet.com/specialtycompliance

CBI’s 4th Annual Compliance Congress for Specialty Products explores the unique compliance challenges for specialty bio/pharmaceutical companies, pre- and post-commercialization.

While specialty products are immensely valuable to patients, they also bring unprecedented risks for manufacturers. A comprehensive compliance program is essential to correctly assessing risks, including patient assistance programs, non-commercial activities, third-party relationships and pharmacy contracting.

At this meeting, take the opportunity to identify and address the top risk areas for specialty product manufacturers and compare strategies for promoting a compliant culture within your organization.

Register by 7/27/2018 and receive $400* off the standard rate with discount code SPC400.

Valuable Insights from 35+ Thought Leaders, Including:

• Gregg Shapiro, Assistant U.S Attorney, Chief of Affirmative Civil Enforcement Unit, U.S Department of Justice (Boston)
• Charles Graybow, Assistant U.S. Attorney, U.S. Attorney’s Office, District of New Jersey
• Bill Hrubes, Vice President, Chief Compliance Officer, ACell, Inc.
• Shoshanna Clark, Head of Operations, NA Ethics & Business Integrity, Sanofi
• Alessandra Ravetti, Executive Director and Assistant General Counsel, Regeneron Pharmaceuticals, Inc.
• Trish Shorey, Privacy Officer, Global Compliance and Risk Management, Shire
• Heidy Abreu, Vice President, Legal and Corporate Secretary, Axcella Health, Inc.
• Kelly Pitt, Director, Legal & Compliance, Sobi, Inc.
• Amy Wilson, MBA, MSJ, Director, Enterprise Compliance, Alexion Pharmaceuticals
• Alessandro Martuscelli, Chief Global Therapeutics Counsel, Bioverativ
• Chad Morin, Senior Director, Healthcare Compliance, bluebird bio
• Brian Conner, Vice President, Head of Corporate Compliance, Strongbridge Biopharma plc
• Sarah Whipple, Senior Corporate and Compliance Counsel, Akebia Therapeutics, Inc.
• David Ryan, Vice President, Associate General Counsel, Chief Compliance Officer, Haemonetics Corporation

Key Reasons to Attend:

• Create a balance between effective patient assistance programs and maintaining compliant practices
• Address the legal issues related to “proactive” versus “reactive” presentations around disease state
• Gain insight into operational safeguards around copay assistance and charitable donations
• Determine if a nurse educator program is necessary and where it should sit within the organization
• Review current and pending state transparency and disclosure legislation
• Assess the controls that compliance or legal need to put in place to ensure that value-based agreements comply with the Anti-Kickback Statute
• Examine the changes in E.U. privacy laws and discuss why it matters to U.S. companies

Register by 7/27/2018 and receive $400* off the standard rate with discount code SPC400.

*Offer expires July 27, 2018; applies to standard rates only and may not be combined with other offers, category rates, and promotions or applied to an existing registration.

The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

        

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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 step that will let Amazon begin growing a pharmacy dispensing business.

We are still a long, long way from a fundamental restructuring of the complex U.S. drug channel. The incumbents still have opportunities to defend their position, capture value from internet technologies, and streamline distribution. However, the prospects of a retail pharmacy shakeout over the next 10 years have just increased.

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This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from April 2018.

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 consumers didn’t pay the pharmacies’ sky-high cash prices.

The results expose the insane soak-the-poor mentality baked into the U.S. pharmacy industry’s historical pricing models. The data also highlight the potential pharmacy opportunity for Amazon.

P.S. Before other states follow Maryland and pass laws against price gouging by generic manufacturers, perhaps they should take a closer look at the behavior of their own states’ pharmacies.

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This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from February 2018.

Wholesalers and retailers have deepened their relationships via generic purchasing consortia—and generic drug makers are feeling the pain. Example: Novartis’ Sandoz business unit reported that its fourth-quarter 2017 sales dropped by 17% "due to increased industry-wide pricing pressure and continued customer consolidation.” (source)

Below, we examine the four generic drug mega-buyers behind this pressure: Red Oak, Walgreens Boots Alliance, McKesson and ClarusOne, and Express Script’s EconDisc.

We estimate that in 2017, these four organizations accounted for an astounding 90% of total U.S. generic drug purchases from manufacturers. Read on for our market share estimates, business profiles, and the outlook for 2018. Spoiler alert: The forecast calls for generic pain.

Today’s post is a sneak peek at our forthcoming 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. The new edition will be bigger than better than ever. Look for it on February 27!

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This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from April 2018. 



You can also reach this post at www.GrossToNetBubble.com. 😉

In 2017, the gross-to-net bubble—the ever-growing pile of money between a manufacturer’s list price for a drug and the net price after rebates and other reductions—hit a new high.

Based on new data from IQVIA, manufacturers of brand-name drugs in 2017 reduced list price revenues by an astonishing $153 billion. Those reductions came primarily from rebates, discounts, and other payments to the drug channel. That figure has grown by 10% from the 2016 figure, even though net prices for brand-name drugs grew by only 1.9%.

We can no longer ignore the warped incentives created by our bubble buddy. As regular readers know, I think plan sponsors and insurers should be more transparent about what they do with the billions collected via pharmacy benefit managers (PBMs) from manufacturers—or even be forced to pass through these rebates to point of sale. Read on and let me know what you think.

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CBI’s Bio/Pharma Forum on the State of Medicare Reform

August 21, 2018 | Arlington, VA

www.cbinet.com/Medicare

Exclusive Offer for Drug Channels Readers: Register Now to SAVE $300* using discount code REF300

CBI’s CPE and CLE accredited Bio/Pharma Forum on the State of Medicare Reform is a one day intensive providing tangible knowledge and strategies necessary to gain clarity on the current political landscape impacting bio/pharma manufacturers with regards to Medicare.

Taking place on August 21 in Arlington, VA, CBI invites you to take this opportunity to come face-to-face with government, associations, health plans and bio/pharma professionals to get the answers to your most pressing questions about navigating uncertainty. You and your team will walk away from the conference with solid tactics for overcoming Medicare policy challenges and an online playbook filled with presentations to utilize as a best practices resource.

Distinguished Speaking Faculty Includes:

• Cynthia G. Tudor, Ph.D., President, The Tudor Group, LLC, Former Deputy Director, Center for Medicare, CMS
• Kelly Brantley, Vice President, Avalere Health
• Andrew Zebrak, Executive Director, Public Policy, Therapeutic Areas, and Advocacy, Boehringer-Ingelheim
• Loren Adler, Associate Director, Center for Health Policy, The Brookings Institution
• John Gorman, Founder, Gorman Health Group
• Steven Pitts, Senior Director, Payer Accounts, Jazz Pharmaceuticals
• Mallory O’Connor, Director, Healthcare Policy & Federal Programs, Biotechnology Innovation Organization – BIO
• And more!

Visit www.cbinet.com/Medicare to view the complete speaker and session lineup, then register using discount code REF300 for this exclusive savings of $300* off.

*CPE and CLE credits pending approval. Discount expires 8/21/18; cannot be combined or applied to existing registration. Other restrictions may apply.

The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

        

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Summer is here! Before you launch your incredible vacation, please enjoy these super Drug Channels stories:

• AHIP misrepresents drug spending data

• HHS Secretary Azar tells Congress about “a system without rebates”

• Sanofi discloses a major gross-to-net gap and declining drug prices

• Asembia shares video highlights from Las Vegas

Plus: a major social justice win for your humble correspondent.

P.S. Follow my daily links to neat stuff at @DrugChannels on Twitter. Recent tweets have covered new drug spending data, M&A news, pharmacy benefit manager (PBM) activities, retail clinics, copay accumulators, track-and-trace, and more.

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