NEW: 2014-15 Economic Report on Retail, Mail, and Specialty Pharmacies

I am pleased to announce the availability of our new report: the 2014-15 Economic Report on Retail, Mail, and Specialty Pharmacies. We’re offering special discounts if you order before February 15, 2015.

This year’s report—our sixth edition—has been completely updated, revised, reorganized, and expanded. It contains the latest financial and industry data, along with detailed information about the strategies and market positions of the largest public companies—CVS Health, Diplomat, Express Scripts, Rite Aid, Walgreens Boots Alliance, Walmart, and others.

We've also added an all-new chapter on specialty drugs and specialty pharmacies.

If you enjoy Drug Channels, then you'll love this report. (Fair warning: the report has 0.0% pop culture content.)

Read on for more details, check out a Free Overview of the Report, or just download the report today. Enjoy!

News Roundup, January 2014: AmerisourceBergen, Walgreens Boots Alliance, Express Scripts, and New 340B Abuses

Winter has arrived at our worldwide headquarters. While you are snowed in, please enjoy this month’s hand-picked artisanal selection of articles from the Drug Channels universe.

• Meet Ornella Barra, the Walgreens Alliance Boots Exec Joining AmerisourceBergen’s Board

• Express Scripts Preannounces its Next Specialty Drug Formulary Battle

• A Nonprofit 340B Hospital Sues Its Poorest Patients: The Unsafety Net?

Plus, The Onion publishes an important anti-vaccination article. It’s your must-forward article of the week!

P.S. Follow @Drug Channels for my daily updates on noteworthy news and analysis.

Reimbursement and Contracting

Reimbursement and Contracting
February 24-26, 2015 / Philadelphia, PA

After a dynamic debut event, CBI’s Reimbursement and Contracting event is back to provide bio/pharmaceutical manufacturers with best practices to optimize commercial contracting and pricing strategies to ensure product success in an ultra competitive and evolving healthcare system.

Join CBI in February and gain insight on pressing issues from 20+ experts representing Acorda Therapeutics, Amneal Pharmaceuticals, Auxilium Pharmaceuticals, Avanir Pharmaceuticals, Bristol-Myers Squibb, Chiesi USA Inc, Medivation Inc, Millennium, Reckitt Benckiser Pharmaceuticals, Sunovion Pharmaceuticals and more!

Key Reasons to Attend:

• Discuss the shift to bundled contracting, accountable care and performance-based payments
• Unravel complexities of the 340B Program and assess the impact on commercial pricing
• Analyze the forthcoming transition to ICD-10 and the anticipated impact on reimbursement
• Address challenges related to specialty drug pricing and contracting
• Understand the impact of commercial contracting strategies on government programs
• Assess the potential impact of the Final AMP Rule on operations and pricing methodologies
• Benefit from three in-depth workshops covering Commercial Pricing and Contracting 101, Shifting Dynamics within the Medicare Part D Space and Innovative Structures and Risk-Share Agreements
• Plus! An optional day three interactive Exchange Access Strategies Summit 

CBI is offering Drug Channels readers an exclusive $300 discount when you register by Friday, January 30th!  Be sure to mention promo code CBI205.

*Offer valid through January 30, 2015, applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to a current registration.

In 2015, 8 of 10 Seniors Choose Preferred Pharmacy Networks in Medicare (Plus: Which Plans Won)

The Centers for Medicare & Medicaid Services (CMS) just released the first batch of 2015 enrollment data for Medicare Part D Prescription Drug Plans (PDPs). These almost-final numbers provide our first look at the winning and losing plans.

Our exclusive analysis shows that preferred cost-sharing networks now dominate the landscape.

• In 2015, 81% of seniors enrolled in PDPs with preferred cost sharing pharmacy networks. 
• Humana’s three preferred network plans grew by 19% and now enroll one in five Part D beneficiaries. 
• Meanwhile, CVS Health’s SilverScript, which has the largest open network plan, lost members in its preferred plan but gained members in its open network plan. (corrected)

Instead of standing in a glass case of emotion, read on for our look at the biggest companies and PDPs.

2014's Top Pharmacies: Specialty Shifts Industry Leadership

Next week, Drug Channels Institute will release our updated and expanded 2014-15 Economic Report on Retail, Mail, and Specialty Pharmacies. The exhibit below—one of 110 in our new report—provides a sneak peek at the largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2014.

The top 15 pharmacies accounted for almost 80% of the pharmacy industry’s revenues. The specialty boom is reshaping the pharmacy industry’s market structure, as evidenced by the prominence of PBM-owned pharmacies with substantial specialty operations.

Read on for the 2014 details. For a sneak peek at the new 2014-15 report, check out the free Overview.

Join Me at PCMA’s Specialty Pharmacy Business Forum

sPCMA Business Forum
March 16 and 17 – Hilton Bonnet Creek | Orlando, FL
http://www.pcmanet.org/events/34

Please join me at the sPCMA Business Forum, where hundreds of executives will meet to discuss the fastest-growing part of the pharmacy industry. Speakers will include PBM, specialty pharmacy and pharma industry decision makers. Joe Scarborough and Mika Brzezinski, co-hosts of MSNBC’s “Morning Joe,” will also be there to discuss politics in health care.

I’ll be participating on a panel to discuss the latest developments in the 340B Drug Pricing Program, and what it means for manufacturers, managed care, specialty pharmacies, and others. I may also moderate a panel of PBM executives. Check the online agenda for the latest news on sessions and speakers.

Conference sessions will cover such critical industry issues as:

• The use and impact of PBM tools in the high cost specialty market;
• The overall complexity of the U.S. biosimilars market;
• How high touch needs of patients, providers and payers are driving specialty pharmacy to become more clinical;
• A new national adoption scorecard and the role of electronic prior authorization in reducing health care costs;
• An overview of market dynamics and trend forecasts;
• Increased channel complexity and risk, value, transparency and decision makers;
• Aligning incentives and payment structures in the health care delivery model;
• A look at consumer adherence behavior and benefit design; and
• 340B Drug Pricing Program

More than 10 hours of CPE sessions will be offered as part of the program. A comprehensive agenda will be posted to the event webpage soon. Click here to learn more and register for the conference.

Watch Stefano Pessina Discuss the New WBA

Last week, executives from the newly-formed Walgreens Boots Alliance (WBA) rang the Opening Bell at the NASDAQ Stock Market. Action shot below.

So, it’s a good time to meet Stefano Pessina, the industry’s new billionaire global overlord. This week, Pessina was making the rounds at the JP Morgan healthcare conference. He's been with Jeff Berkowitz, who is on the short list of possible CEO candidates (I hear). Check out the video below.

For a refresher of how we got here, see Walgreens Loses Its CEO: How Did We Get Here? What’s Next?

For fun and/or jealousy, you can track Mr. Pessina's Real Time Net Worth at Forbes. This morning, it was $11.3 billion.

The Newest Benchmarking Numbers on Retail and Specialty Pharmacy Reimbursement

The Pharmacy Benefit Management Institute (PBMI) recently released its 2014-2015 Prescription Drug Benefit Cost and Plan Design Report. (Free download with registration.) IMHO, it provides invaluable insight into employer-sponsored pharmacy benefits. Drug Channels again toasts Takeda Pharmaceuticals North America for having sponsored the research.

The report offers the only public benchmarking data on pharmacy reimbursement rates. Below, I summarize its numbers for brand-name drugs, by dispensing channel.

As you will see, retail pharmacies received the highest reimbursements, even as the gap with mail pharmacies has narrowed. The retail reimbursement rate, as measured by the percentage discount from Average Wholesale Price (AWP), has remained surprisingly steady in recent years.

Drink up the details below. And don't forget about PBMI’s 20th Annual Drug Benefit Conference in March.

Expanded Access Programs

Expanded Access Programs
February 3-4, 2015 – Philadelphia, PA
www.cbinet.com/EAP

CBI invites you to join your colleagues this February at CBI’s Expanded Access Programs, a tailored, two-day meeting for those considering or currently working on the design and execution of 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.

As the issues around early access, compassionate use and patient voice in R&D grow in prominence and importance within the FDA and the patient community, now is the time to prepare your organization to ensure the ethical and compliant delivery of Early Access Programs. https://www.cbinet.com/conference/PC15193 Share best practices and lessons learned regarding providing investigational, pre-launch or end-of-lifecycle drugs to patients for treatment purposes.

Gain critical insight on pressing issues from a dynamic group of key stakeholders from companies including Boston Biomedical Pharma, Genzyme, Pfizer, Bristol-Myers Squibb, Novartis Oncology, Raptor Pharmaceuticals, and more!

Special highlights include:

• FDA Address: New Models for Patient Collaborations and Key Standards for Programs and Protocols
• NORD Address: Paving the Path for Expanded Access to Investigational Drugs — U.S. Considerations from a Patient and Policy Perspective
• BIO Address: Policy, Science and Compassion — Company Commitment, Challenges and Considerations for Access to Unapproved Product
• Point Counterpoint Drug Debate: Take Pause vs. Too Urgent to Wait

CBI is offering Drug Channels readers an exclusive $300 discount when you register using promo code DC0203.*

*Offer valid through February 3, 2015, applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to a current registration.

IIR’s 14th Annual ePharma Summit

IIR invites you to attend ePharma, taking place February 24-26, 2015 in NYC. Challenge your mindset with unique perspectives and tech to disrupt your strategy and drive ROI.

Download the brochure

Customize your agenda

Pharmaceutical executives: New for 2015! Buy One Pass, Get One Free*

For all other attendees: As a partner for the event, Drug Channels readers receive a 15% discount off the standard rates! Register now to SAVE 15% off standard rates with code XP2006DRUG.

Details on speakers and topics below, or on the IIR website.

How PBMs Profit From the Hepatitis C Formulary Wars...And What It Means for Specialty's Future

A new formulary exclusion battle is happening in specialty drugs…and PBMs will be profiting.

Just before Christmas, Express Scripts made AbbVie’s new Viekira Pak the exclusive option for genotype 1 hepatitis C patients covered by its national preferred formulary. This week, CVS/Caremark made Sovaldi and Harvoni (both from Gilead Sciences) the exclusive options for patients with hepatitis C.

I estimate that these formulary moves, combined with specialty pharmacy dispensing, will allow the PBMs to earn as much as $2,600 to $3,100 per patient. Pretty, pretty, pretty good.

Within three years, the generic wave ends, and specialty drugs will become payers’ primary focus. Expect more formulary battles as specialty classes get crowded with multiple therapeutic alternatives.

How Rite Aid is Benefiting from Its New McKesson Relationship

Let’s start 2015 by looking at Rite Aid’s most recent quarterly results, reported in late December. Read Rite Aid's earnings press release and the transcript from its December earnings call.

As you may recall, in 2014 Rite Aid shifted to direct-store-distribution by McKesson, and turned over generic purchasing to McKesson. (For background, see McKesson, Rite Aid, and the Changing Generic Channel.)

Rite Aid’s latest quarterly results show significant benefits in generic purchasing, profits margins, and inventory management. Days sales in inventory has decreased by 12% and likely to drop further. (See the chart below.) If Rite Aid keeps posting such positive results, expect other large pharmacy buyers to give in the towel and begin sourcing generics through the large wholesalers.

As a bonus, Rite Aid CEO John Standley also explained how the pharmacy industry’s evolutionary dynamics are just like Alice in Wonderland’s Red Queen. Well, that’s what I heard…

Oncology Commercialization & Market Access

8th Oncology Commercialization & Market Access
February 24-25, 2015 | San Francisco, CA
www.cbinet.com/oncology

The oncology marketplace is a competitive environment in which a strong commercialization strategy is essential for product success. As more products enter the pipeline, how do you ensure that market access is attained? This in-depth and dynamic event examines the implications of recent product approvals (such as Sovaldi) on their value demonstration in the oncology marketplace.

Join your industry colleagues at the 8th Oncology Commercialization & Market Access Strategies conference to maximize market access and meet commercial goals for both new and existing oncology therapies. Visit www.cbinet.com/oncology for more information.

Drug Channels readers will save $200 off of the standard registration rate when they use discount code HCE967.*

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