Drug Channels News Roundup: September 2012

Hard to believe that autumn is upon us already. Time to pack away your golf shirts and bust out the sweaters. But before you start raking the leaves, check out these news stories from the Drug Channels universe.

In this issue:

• Global Pharmacy—A lightweight article on Walgreen and Alliance Boots
• Catching the Bad Guys—How stolen drugs ended up in retail pharmacies
• Bona Fide Service Fees—Challenges for generic manufacturers
• Meet Mr. Collis—A humanizing profile of AmerisourceBergen’s South African CEO

Plus, the Onion looks at popular autumn activities.

Earth's Drugstore: Walgreen Hedges Obamacare With Global Boots Alliance
This puff piece from Forbes profiles Walgreen, following its complex two-step acquisition of European wholesaler/retailer Alliance Boots. The “obamacare hedge” angle seems like a stretch, especially since the UK government also just cut pharmacy reimbursements. The article is worth reading, but it's clearly written by someone who doesn’t really understand Alliance Boots’ business or the EU pharmacy market. FYI, pharmaceutical wholesaling accounts for two-thirds of Alliance Boots’ revenues. About 80% of this wholesale business comes from France, Germany, the UK, and Turkey. In contrast, almost 90% of AB’s drugstore business is concentrated in the UK, because chain drugstores are prohibited from operating in most major EU countries (including France and Germany). So, it’s no surprise that Walgreens expects deal synergies to come primarily from sourcing (lower cost of goods), rather than being a global drugstore brand.

Pharma Supply Chain Criminals Get Justice
In Drug Theft + Diversion Gets Bigger, I discuss the unfortunate tendency for stolen pharmaceuticals to find their way back into the legitimate supply chain. Well, the Department of Justice has now secured guilty pleas from executives at two small wholesalers—Altec Medical and Ocean Pharmed. Dirk Rodgers at RxTrace provides a concise summary, along with a lucid description of the tradeoffs between paper pedigress, e-pedigrees, and point of dispense (POD) authentication.

Generic Manufacturers and Service Fees
Chris Coburn and his colleagues at the Pharma Compliance Blog have been running a very insightful series on bona fide service fees in wholesaler agreements. This article nicely summarizes the challenges facing generics manufacturers. As I note in New AMP Rule Targets Bona Fide Service Fees, CMS is focusing on these fees and will (someday) issue more guidance. For more on the economics behind manufacturer-wholesaler agreements, see chapter 3 of my brand-new wholesaler report.

SA CEO a major US success story
In the July news update, I highlighted personal profiles of the chief executives from Walgreen and Cardinal Health. This month, we turn to the Sunday Times, South Africa’s biggest-selling weekly newspaper, for a profile of AmerisourceBergen CEO Steven Collis. It’s a fascinating look at the man behind the role, told from a local-boy-makes-good angle. (Oddly, the article is just above a story titled: “Tramp threw dog at couple.” LOL!)

Popular Autumn Activities
The Onion, America’s Finest News Source, provides this helpful infographic to get ready for Autumn.