A Holiday Greeting Dance from Drug Channels

Dear Drug Channels reader,

Wow. It’s hard to believe that another crazy, busy year is already coming to an end.

Thank you for welcoming me into your inboxes and browsers. I’ve had fun writing about 2014’s unexpected, unusual, and fascinating developments. I’m grateful to our many sponsors and guest writers. (Email Paula if your company wants to publish a guest post.) Special thanks to the brave souls who joined in the often-spirited discussions below the articles.

2014 was another big growth year for Drug Channels. We now have about 10,000 subscribers, including almost 1,700 @DrugChannels Twitter followers. Our Drug Channels Institute subsidiary is humming along.

Drug Channels will return in 2015. In the meantime, please enjoy the video greeting below, which gives you a small taste of my awesome dance skillz. (I'm ready for my dance-off with Star Lord.)

Have a great holiday! All the best to you and your family,
Adam

December 2014 news update: Walgreens, Express Scripts, Diplomat, AmerisourceBergen, and CVS Health

December at last! It’s time for our final news roundup of 2014. To help you with the next four nights of Hanukkah, here are four stories that go behind the headlines and highlight notable individuals atop some well-known drug channels companies.

• Greg Wasson, Walgreen—A behind-the-scenes look at his departure

• Steve Miller, Express Scripts—A humanizing profile of this vocal PBM executive

• Phil Hagerman, Diplomat Pharmacy—A cool first-person perspective on growth and going public

• Peyton Howell, AmerisourceBergen—A worthwhile peek at ABC’s global ambitions

Plus, The Onion reports that CVS is having trouble quitting cigarette sales. It’s your must-read article of the week!

Highlights of CVS Health’s Latest Specialty Market Forecasts

Yesterday, CVS Health held its annual Analyst Day. The accompanying 224-page slide deck provides great insight into the company’s strategy.

Senior executives told investors how everything is awesome. There is even a section titled “We Made the Right Moves.” (Really.)

CVS Health also provided a wealth of data about the pharmacy and managed care market. Below, I highlight some specialty market projections that caught my eye.

CVS has an unfortunate tendency to change its basis of presentation every year, so be sure to read the slide footnotes to figure out what’s really going on.

What’s Behind Medicare and Medicaid Drug Spending Growth?

Let’s dip back into the just-released 2013 National Health Expenditure data, which the Centers for Medicare & Medicaid Services (CMS) recently released. In last week's Hospitals and Physicians Spending Outpace Drugs in Latest U.S. Healthcare Spending Data, I compare drug spending growth with spending growth of other healthcare services.

Today, I delve into drug spending trends by payer. As I describe below, policy and population changes led to significant drug spending growth by Medicare and Medicaid, while private health insurance and consumers paid less.

The 2013 numbers provide a peek at the forces that will change drug payment in the coming years. Don't say you weren't warned!

Government Drug Pricing Forum

Government Drug Pricing Forum
February 11-13, 2015
Embassy Suites Washington DC Convention Center, Washington. DC

With the increase in complexity of government pricing and contracting, the Conference Forum is no longer holding its Medicaid Rebate Summit. Instead, it is expanding its coverage and presenting the Government Drug Pricing Forum (GDP). The GDP Forum will cover changes in MDRP, 340B, Tricare and Medicaid Managed Care. It specifically addresses the AMP Final Rule, AMP-based FULs, proposed HRSA guidance, rise of contract pharmacies, and new state reporting requirements impact government and commercial contracting rules and operations. This event brings together CMS, FDA, IRS, HRSA, States and OIG to address how to be compliant with separate agency requirements.

Register today! Drug Channels readers receive a 15% discount with code DC15.

Featured Speakers include:

Lori Reilly, PhRMA	Laurel Todd, BIO
Don Bell, National Association Chain Drug Store (NACDS)	Ann Maxwell, Office of Evaluation and Inspections, Office of Inspector General
Andrew Wilson, McKesson	Alice Valder Curran, Hogan Lovells
John Shakow, King & Spaulding	Kathleen Black, Pfizer
George Kenny, Genentech	Stephanie Kupski, Iroko Pharmaceuticals
Ed McAdam, Daiichi Sankyo	Jay McKinley, Dendreon
Lorraine Moccio, Johnson & Johnson

Conference Topics

• Healthcare Trends and Policy Expectations: From ACOs and AMP to Contract Pharmacies

• New State Reporting Requirements and Tricare Contracting

• Drug Channel Contracting Strategies

• Compliant Government Pricing Programs

February 11th Workshop Choices

• Government Pricing Programs 101

• 340B Program Policies, Operational Answers, and Audits Findings 

Register today! Drug Channels readers receive a 15% discount with code DC15.

Walgreens Loses Its CEO: How Did We Get Here? What’s Next?

By now, you’ve surely read this press release: Walgreens President and CEO Greg Wasson Announces He Will Retire Following Completion of Merger with Alliance Boots

File this news under “expected surprise,” as this outcome has been building all year. Stefano Pessina will take over as acting CEO. Shocking, I know.

How did we get here? Who’s the next CEO? My summary and some speculations below.

Hospitals and Physicians Outpace Drugs in New U.S. Healthcare Spending Data

Last week, the econowonks at the Centers for Medicare & Medicaid Services (CMS) released the 2013 National Health Expenditure data. Savor the numbers in this Health Affairs article: National Health Spending In 2013: Growth Slows, Remains In Step With The Overall Economy. (Free download)

It’s fashionable to blame healthcare spending growth on pharmaceuticals, but it’s also inaccurate. In 2013, prescription drug spending grew by 2.5%, which was 110 basis points behind the 3.6% growth in overall expenditures.

Our analysis also shows that spending on hospital care and physician services, which account for a majority of healthcare expenditures, grew more quickly than drug spending. See the chart below.

CMS projects that these trends will reverse in 2014, because of healthcare reform’s rollout and Sovaldi’s legendary launch. Until then, don’t blame drugs.

Hub Models and Program Design

4th Hub Models and Program Design
February 5-6, 2015 | Philadelphia, PA
www.cbinet.com/hubs

With mounting cost pressures and increased demands for affordable, value-based treatment options, bio/pharmaceutical teams face an increasingly competitive specialty market. They also confront a number of challenges in effectively managing product and patient services.

The 4th Hub Models and Program Design conference brings together key specialty bio/pharmaceutical thought leaders for a dynamic and collaborative, two-day event to help you and your team effectively manage your brand and ensure patient services. Visit www.cbinet.com/hubs for more information.

Speakers include representatives from: Children’s PKU Network | Cubist Pharmaceuticals | CVS Health | The Dedham Group | Eisai Inc. | Endo Pharmaceuticals | Genzyme | Horizon Health Services | Hyperion Therapeutics | Ipsen Biopharmaceuticals, Inc. | Lash Group, an AmerisourceBergen company | Loeb & Loeb LLP | ProMetrics | Raptor Pharmaceuticals | Relypsa Inc. | Sonexus Health | UBC | Viewpoint Health

Register today! 

Drug Channels readers will save $200 off the standard registration rate when they use code RGX588.*

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. Other restrictions may apply.

McKesson Officially Dominates Celesio

On Tuesday, McKesson announced that it had achieved operational control over Celesio, the global retail and wholesale company operating in 13 European countries and Brazil. Read the press release.

Technically, the Stuttgart Higher Regional Court approved the " domination and profit and loss transfer agreement" between Celesio AG and McKesson’s German subsidiary. Domination! Hard to beat that evocative Teutonic M&A terminology.

The three largest, U.S.-based wholesalers are now all expanding significantly outside North America—a key trend in our 2014-15 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. The McKesson-Celesio deal exemplifies this new era of global drug distributors. Read on for details.

Profits Up Again for Independent Pharmacy Owners

Time for my annual look at independent pharmacy owners’ business economics, drawn from the recently released 2013 National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here's the press release: NCPA Digest: Community Pharmacists Promoting Medication Adherence, Generic Drug Savings

Once again, independent pharmacy owners are doing better than you might expect. In 2013, overall profits increased (again), while the average pharmacist owning a single pharmacy earned about $247,000. The number of independent pharmacies continues to hold steady.

Bottom line: Smaller independent pharmacies remain an important and healthy industry segment. Keep that in mind when pharmacies ask for any new special legislative protections.

As always, I welcome your constructive comments. Just remember our Drug Channels philosophy, courtesy of the late senator Patrick Moynihan: "Everyone is entitled to his own opinion, but not his own facts."

Specialty Therapies 2015—A Forum for Payers

Specialty Therapies 2015—A Forum for Payers
January 29-30, 2015 | Las Vegas, NV
www.cbinet.com/specialtytherapies

The cost of specialty therapies continues to increase significantly as the number of available specialty drugs grows rapidly. It is crucial to evaluate the best techniques for managing cost, access and quality of specialty therapies.

Now in its 12th year, the Specialty Therapies Summit expands with all new content offerings, networking opportunities and value.

Hear from a distinguished speaking faculty from industry-leading companies including BlueCross BlueShield of South Carolina/BlueChoice HealthPlan, Blue Cross Blue Shield of Tennessee, California Chronic Care Coalition, Denver Health Medical Plan, Inc., Kaiser Permanente, Priority Health, United Healthcare Pharmacy and more!

Visit www.cbinet.com/specialtytherapies for the complete agenda.

Drug Channels readers will save $200 off of the standard registration rate when they use discount code HKN525.*

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. Other restrictions may apply.