Modern Distribution Management recently published my article 2016 MDM Market Leaders | Top Pharmaceuticals Distributors. It is an excerpt from the 2016-17 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
Below, I republish the section 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 an eventful 2017.
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Time for my annual look at independent pharmacy owners’ business economics, drawn from the recently released 2016 National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here's the press release: Independent Community Pharmacies Vital to Patient Medication Access, NCPA Digest Finds.
Below, I review our latest estimates on pharmacy economics and margins. The data reveal that independent pharmacy owners are starting to perform poorly. In 2015, the average pharmacist owning a single pharmacy earned about $200,000. It’s the second year in which the average owner’s compensation declined. The number of independent pharmacies and gross margins also are trending downwards.
Surprisingly, the NCPA data also show that independent pharmacies are underperforming with generic substitution.
Read on for my look at pharmacy profits and my advice for pharmacy owners.
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The 2nd Annual Government Programs Summit
February 27-28, 2017 • Arlington, VA • Sheraton Pentagon City Hotel
The 2nd Annual Government Programs Summit provides an opportunity for industry executives to come together for timely discussion around best practices and implementation to navigate this evolving regulatory landscape. Insights from leading pharmaceutical and government organizations in the Medicaid and Government Pricing arena present vital content to develop strategies that ensure compliance and understanding of the AMP Final Rule, 340B regulations, and the future of Government Pricing.
Join your industry peers February 27-28 in Arlington as we bring together multiple stakeholders with different perspectives discussing strategies for responding to regulatory and implementation challenges. As your ecosystem evolves and operating in silos is no longer an option join the conversation, with health plans, MCOs, providers and government agencies all under one roof as we convene a forum with three co-located health care meetings, taking discussions and peer-to-peer learning to a whole new level!
Please visit www.worldcongress.com/govprograms to register or for more information. Those who register will receive a $300 savings when they use promo code DC300.
2017 Topics Discussions Include:
Visit www.worldcongress.com/govprograms to view the full agenda and to register.
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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Pharmacy benefit managers (PBMs) are facing unprecedented criticism about their business practices and levels of transparency. Which got me wondering: What do plan sponsors—the PBMs’ customers—think about their PBMs?
For the answer, I turned to Pharmacy Benefit Management Institute (PBMI) 2016 Pharmacy Benefit Manager Customer Satisfaction Report (available for purchase.) It rates 11 PBMs based on feedback from more than 500 plan sponsor customers.
The data show a strong association between a PBM’s perceived transparency and a plan sponsor’s satisfaction. As you will see in the charts below, plan sponsors are more satisfied with PBMs that are more transparent.
Yet the causality of this relationship isn’t entirely clear. Smaller plan sponsors tend to work with smaller PBMs, which are rated more highly on transparency and alignment of goals. Are more transparent PBMs truly better? Or, are we observing a selection effect, whereby plan sponsors with fewer internal resources choose PBMs with different business and profit models? And if PBM transparency is so wonderful, why don’t all plan sponsors insist on it?
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Novo Nordisk just released new data on the channel economics and pricing for its insulin products. See Perspectives from NNI President Jakob Riis on pricing and affordability
Like many manufacturers of relatively undifferentiated products, Novo Nordisk is trapped by a gross-to-net rebate bubble. Its list prices soar, but the net realized price barely budges. Below, I review Novo’s evidence on channel economics and highlight the perverse incentives that keep inflating the bubble.
The debate is heating up about the warped incentives baked into our crazy drug channel. I continue to believe that traditional pricing approaches will not survive. Novo even promised that future list price increases will be "no more than single-digit percentages annually." The change will be disruptive to PBMs, wholesalers, and payers. Who knows? Maybe the patients will benefit, too.
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CBI’s 8th Hub and SPP Model Optimization
February 22-23, 2017 | Philadelphia, PA
Don’t miss the 8th installment of the industry’s must-attend meeting for sharing breakthrough strategies surrounding service model design and enhancement to improve access and outcomes!
CBI’s Hub and Specialty Pharmacy Provider (SPP) Model Optimization boasts exceptional networking opportunities and forward-thinking content from a broad array of stakeholders. Join your peers as you prepare to launch, transition or reboot your corporate or product approach to hub services.
Hear Industry Trailblazers Speak on High-Impact Topics, Including:
Showcasing a dynamic group of key stakeholders from companies including Amgen, Avella Specialty Pharmacy, Bayer Healthcare, Boehringer Ingelheim, CoverMyMeds, GlaxoSmithKline, Intarcia Therapeutics, Lash Group, a part of AmerisourceBergen, MedImpact Healthcare Systems, Nuvera Life Sciences Consulting, Ogilvy CommonHealth Worldwide, Sobi, Sonexus Health, VirMedica and Triplefin, this is an opportunity you can’t afford to miss!
For more information, please download the complete agenda or visit www.cbinet.com/hubs. Drug Channels readers will save $400 off of the standard registration rate when they use discount code FAZ895.*
*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. 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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Well, CVS Health blinked.
In July 2017, CVS Health’s retail pharmacies will become a preferred retail channel for 90-day prescriptions dispensed to OptumRx’s commercial clients. Here’s the press release: OptumRx and CVS Pharmacy Partner to Expand Consumer Choice, Reduce Costs and Improve Health Outcomes.
The surprise announcement echoes the arrangement that OptumRx established with Walgreens. The new deal signals that CVS is starting to counter Walgreens’ aggressive partnering strategies. OptumRx customers also get to choose which chain will be their preferred 90-day at retail provider.
Below, I provide some context for the agreement and outline CVS Health’s two basic strategic options as it competes with Walgreens. I’m very curious to hear how CVS Health will spin this latest move during its upcoming analyst day, on December 15.
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Hope everyone enjoyed the Thanksgiving holiday! Now that you’ve stretched your stomach, stretch your mind with some food for thought. In this issue:
Plus: The FDA approves a new product—with a twist!
P.S. ON SALE! Our 2016 Economic Report on Retail, Mail, and Specialty Pharmacies is now 40% off. The 2017 edition will be released in early February. (FYI: I announced the sale yesterday on @DrugChannels.)
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Expanded Access Programs 2017
March 9-10, 2017 | Washington, DC
The evolving political landscape is transforming and expanding patient access to experimental and unapproved drugs. CBI’s Expanded Access Programs is dedicated to the nuances and intricacies of designing and implementing early access programs. This multi-stakeholder event is focused on U.S. and global models for a variety of access management programs, including, but not limited to:
Expanded Access Programs, Early Access Programs, Compassionate Use Programs, Named Patient Programs and Managed Access Programs.
This is your opportunity to take a deep dive into the implications, prevailing policies, and current industry approaches to expanded access programs. Join industry thought-leaders and share key concepts around providing investigational, pre-launch or end-of-lifecycle drugs to patients for treatment purposes.
Visit www.cbinet.com/expandedaccess for more information.
Drug Channels readers will save $400 off of the standard registration rate when they use discount code EAPDCH.*
*Applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to an existing registration. Offer not valid on workshop only or academic/non-profit registrations.
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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CBI’s 12th Life Sciences Trade and Channel Strategies
December 13-14, 2016 | Philadelphia, PA
www.cbinet.com/trade
Don’t miss the must-attend event for industry trade, channel, account and pharmacy strategy professionals!
CBI’s Annual Trade and Channel Strategies Conference boasts incomparable networking opportunities and unmatched, forward-thinking content from a broad array of stakeholders.
Drug Channels readers are eligible for a Thanksgiving week discount. Save $400 off of the standard registration rate when you use code MUT953.* Hurry! You must register by Friday, November 25th!
Can’t Miss Keynotes Featuring:
Industry Trailblazers Speak on High-Impact Topics Transforming Trade Strategy, Including:
Pharmacy and Wholesale Business Economics | Organized Commercial Customers | Payers’ Channel Management Strategies | Government Regulations and Policy | Shift to IDNs and HMOs | Network Strategies and Distribution Trends | Pharmacy and Provider Models | Valeant/WBA Relationship | Reimbursement | Site-of-Care Reform | Vertical Integration | Globalization | Channel Considerations for Brands, Generics, Specialty and Biosimilar Products | Serialization | Co-Pay Programs
Over 50 participating companies thus far:
AbbVie | Alcon | Alexion | Alkermes | AmerisourceBergen | Amgen | Astellas | AstraZeneca | Bayer HealthCare | Biogen Idec | Blue Fin Group | Boehringer Ingelheim | Bracco Diagnostics | Bristol Myers Squibb | BTG International | Daiichi Sankyo | Depomed | Diplomat | Eli Lilly | Elwyn Pharmacy Group | Emmaus Life Sciences | FFF Enterprises | Genentech | Gilead | Goldman & Sachs | Hospital of the University of Pennsylvania | Indivior | Jazz Pharmaceuticals | Johnson & Johnson | Lilly USA | Mallinckrodt | Merck | Mylan | Novartis | PDX | Pembroke Consulting | Pfizer | Purdue Pharma | Radius Health | Relypsa | Rx Sourcing Strategies | Sanofi| Smith Drug Company | Sunovion | Takeda | Teva | Texas Oncology | Therigy | UCB | ZS Pharma
For more information, please download the complete agenda or visit www.cbinet.com/trade.
*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. 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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