Dear Drug Channels reader,
Wow. Hard to believe that 2011 is almost over!
Thank you for welcoming me into your inboxes and browsers this year. It's been an eventful 12 months, with no shortage of interesting topics and controversial news. I appreciate the many people who took time to engage in often-spirited discussions below the articles.
I want to give a special thank you to my consulting clients. I'm very grateful for the opportunity to work with you. I learn so much from our interactions and hope I offered as much value in return.
Drug Channels will be back in 2012. In the meantime, please enjoy the video greeting below from my disco dancin' alter ego!
This law may appear to be a big victory for pharmacies, but they shouldn't pop the champagne yet. Governor Cuomo stipulated that “a retail pharmacy must agree in advance to accept the same reimbursement rate and applicable terms and conditions established for mail order pharmacies.”
Put another way, Cuomo called the pharmacy lobby’s bluff by requiring retail pharmacies to compete directly with mail, even though a retail pharmacy's costs and service model is different.
This bill is one more step towards an inevitable race-to-the bottom generic price war. If other states pass similar bills, expect to see profits drop even faster at pharmacies, PBMs, and wholesalers. The generic wave may turn out to be less profitable than everyone is expecting.
In case you haven’t been paying attention, the Center for Medicare and Medicaid Services (CMS) continues to pump out monthly Average Manufacturer Price (AMP) data. The September 2011 data was just released.
The data confirm that generic drugs remain very inexpensive. More than half of generic drugs are sold by the manufacturer for less than 15 cents per unit. Remember, these are actual transactional prices, not list prices.
For fun, I created an index of generic prices. Based on the first three months of AMP data, this Index of Generic Weighted Average AMPs (IGWAAMPS, pronounced “igg-whamps”) rose by 4.9% from July to September.
I am pleased to welcome back IIR as a Drug Channels sponsor for its 4th Annual Government Programs Summit. The event will be held March 14-16, 2012, in Baltimore.
IIR bills the Summit as "the nation's largest gathering of government programs, compliance experts, and drug pricing executives." In addition to industry speakers, you'll also hear first-hand from 25 Government officials from CMS, OIG, OPA, PVP, PSSC, VA, DoD, and State pharmacy boards.
IIR is offering a special 25% discount to Drug Channels readers. Just register with your VIP code: XP1751DRUG. Thanks, IIR!
In Young Scientists Take Aim, the Wall Street Journal profiles one of the country's top NCAA rifle teams—the pharmacy students at Philadelphia's University of the Sciences.
Yes, you read that correctly. Last season, the USciences pharmacy team was ranked equal to the Virginia Military Institute. Yikes!
In the video below, an intrepid reporter probes the burning question: "Should the armed forces be recruiting marksmen from pharmacy schools?" (Uh, no?)
Hmmm, I wonder if CMS employees will think twice before implementing the new AMP-based FULs...
I want to give you a sneak peek at the updated market share computations for specialty pharmaceuticals.
In 2010, $39.2 billion of specialty drugs were dispensed by retail, mail, and specialty pharmacies.
Pharmacy dispensing revenues from specialty drugs grew by 15.3% from 2009 to 2010.
Pharmacy dispensing of specialty drugs remains more concentrated than the overall pharmacy industry.
The company revenues, market shares, and rankings (shown below) have changed since our previous estimates. Below, I explain what's behind these differences.
Atorvastatin now becomes a three horse race between Pfizer’s heavily-discounted brand-name product, an authorized generic from Watson, and the first-to-file generic Ranbaxy.
The claims and counterclaims about savings are hard to sort out. But Ranbaxy’s presence in the market will most likely boost profits for pharmacies, PBM, and wholesalers.
