Drug Channels News Roundup, March 2016: Anthem, Express Scripts, and Cardinal Health

Time to pig out on this month’s squeal-worthy selection of news stories that we found while rooting around the pharmaceutical trough. In this issue:

• My $0.02 on Anthem’s Other Motivation for Its Express Scripts Lawsuit

• Trinity Health Fires Wholesaler Cardinal Health and Takes Its Supply Chain In-House

• Express Scripts Provides a Useful Look at the Generic Pipeline in 2016

P.S. For daily updates on the spam-free stuff that I think is interesting, join the cool kids who wallow with @DrugChannels on Twitter.

Rx Sample Management and Logistics Summit

Rx Sample Management and Logistics Summit
April 19-20 | Philadelphia, PA
www.cbinet.com/sample

Greater efficiency and better results are no longer a competitive advantage, but are now a necessity in today’s complex, competitive and challenging healthcare environment. Through interactive discussions, robust panels, breakout sessions and in-depth presentations, CBI’s Rx Samples Management and Logistics Summit arms you with the tools and roadmaps you need to eliminate the gap in your brand’s sphere of influence.

At this year’s conference, delve into strategies for effectively connecting with HCP, NP and PA stakeholders while optimizing sample data collection and reporting processes to ensure greater efficiencies. Take advantage of this unique platform that provides you with actionable information on sample compliance, data and reporting while connecting you with leaders in the industry for solution-oriented and collaborative discussion.

Visit www.cbinet.com/sample for more information.

Speakers Include Representatives from:
Janssen | Johnson & Johnson | Pfizer | Novo Nordisk Inc. | Sanofi-Genzyme | Boehringer Ingelheim Pharmaceuticals, Inc. | Adherent Health, LLC | Alnylam Pharmaceuticals | | Shire | ZS Pharma, Inc. |

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Walgreens Boots Alliance Gets Busy with OptumRx and AmerisourceBergen Deals

Our spidey sense tells us that Walgreens Boots Alliance (WBA) has been one busy company lately. As expected, WBA has increased its ownership stake in AmerisourceBergen to about 15%. A second seat on ABC's board is not far away.

Somewhat less expected: WBA has stepped into the parlor of UnitedHealth Group’s OptumRx PBM and become its preferred pharmacy partner.

Below, I provide some commentary to help you untangle these deals and figure out what they mean for the drug channels web.

Four Takeaways on Drug Spending Realities from the New 2015 Express Scripts Drug Trend Report

Last week, Express Scripts released its new 2015 Drug Trend Report. Click here to download the complete report. (Free download.) You should also read the press release, which offers additional information that is inexplicably excluded from the full report.

For the first time, the Express Scripts data account for rebates—a meaningful and welcome improvement in reporting methodology. After accounting for rebates, the 2015 report reveals that drug spending growth is comparable to growth in other parts of the healthcare system. For some payers, utilization (script growth) was a bigger driver of spending than drug prices.

So much for the myth of exploding drug costs! Our politicians may not believe it, but Martin Shkreli et al. are the exception in the pharmaceutical industry. Below, I review the four key highlights about traditional and specialty drug spending, trend patterns for different payers, and a red flag from upcoming biosimilar launches.

Plus, diving into the numbers is more fun than contemplating the Anthem-Express Scripts kerfuffle and the meaning of such ill-defined terms as "competitive benchmark pricing."

Electronic Benefit Verification & Information Exchange Summit

CBI’s Electronic Benefit Verification & Information Exchange Summit
May 17-18, 2016 | Philadelphia, PA
www.cbinet.com/eBenefit

The healthcare industry is clamoring for a more standardized and primarily automated approach to coverage determination and patient access, including systems integration and streamlined communication across different channels.

CBI’s Electronic Benefit Verification & Information Exchange Summit convenes manufacturers, health plans, PBMs, pharmacies and prescribers to focus on the steps needed to exchange data in an accurate and streamlined manner to ultimately ensure timely patient access to prescriptions. The major areas of focus include advancements in benefit verification and ePrior authorization, as well as other forms of electronic messaging/communications like prescription drug monitoring programs and electronic prescribing of controlled substances.

Gain critical insights on key developments:

Systems integration and connectivity | Real-time benefit verification (RTBV) | ePrior authorization (ePA) adoption | Formulary visibility | Interoperability requirements | EHR systems | Clinical decision-making | Standards development | Prescription drug monitoring programs | Prescriber workflow | Medical vs. pharmacy benefit | Specialty automation

For more information, please download the complete agenda or visit www.cbinet.com/eBenefit. Drug Channels readers will save $200 off of the standard registration rate when they use discount code YRE997.*

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

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Why CMS’s Crazy Plan to Remake Medicare Part B Won’t Work

In an amazing display of bureaucratic hubris, the Centers for Medicare & Medicaid Services (CMS) has proposed a mandatory, real-world experiment with provider reimbursement under the Medicare Part B program. Click here to read the summary. You can read the details in this Federal Register notice.

As I explain in more detail below, CMS wants to reduce reimbursement for buy-and-bill drugs—but for only half of the country's providers. The other half will retain current reimbursement levels. After five years, CMS will see what happened.

Some potentially good ideas are buried in this mess. But the proposal so overreaches that it will face enormous opposition and has little chance of being implemented.

Even if CMS can get the first part of its proposal off the ground, I doubt that CMS will be able to draw any meaningful conclusions from it. Marketplace realities will undermine the integrity of this massive and unprecedented experiment on patients and providers.

Read on for my summary of CMS’s proposed Part B Drug Payment Model and the glaring methodological flaw that could end up raising drug costs. There will be no gold at the end of this rainbow.

Medicaid and Government Pricing Congress

CBI’s 18th Medicaid and Government Pricing Congress
May 18-20, 2016 | Orlando, FL
www.cbinet.com/Medicaid

With the monumental task of implementation following the release of CMS’ Final Rule on Covered Outpatient drugs, there is no better time to register for CBI’s Medicaid and Government Pricing Congress, May 18-20, 2016 in Orlando, FL!

The complete agenda is now available and features compelling content, interactive discussions and instrumental insights discussing the most pressing topics, including the Final AMP Rule, 340B GTN, VA and FSS, invoice processing, contract compliance and much more. Benefit from the opportunity to network, learn and benchmark during this pivotal time to align thinking on complex issues and effectively prepare your organization for the impending post-implementation filings.

Register now and don’t forget to book your stay at our host hotel, Disney’s Yacht & Beach Club Resort in Orlando, FL. Drug Channels readers will save $400 off of the standard registration rate when they use code HRE889 and register prior to April 15th.*

Esteemed Faculty Includes Speakers Representing:
AbbVie | Acorda Therapeutics | Amneal Pharmaceuticals | Arnold & Porter | BIO | Biogen | Bristol-Myers Squibb | Celgene Corporation | Chiesi USA | CMS | Cumberland Consulting Group | Daiichi Sankyo | Deloitte & Touche LLP | Eli Lilly & Company | Ernst & Young LLP | Fresenius Medical Care | GlaxoSmithKline | Government Pricing Specialists, LLC | Hogan Lovells US LLP | Horizon Pharma | Hospira | Huron Life Sciences | Impax Pharmaceuticals | Indivior Pharmaceuticals | Jazz Pharmaceuticals | Johnson & Johnson | King & Spalding | KPMG LLP | M. Lee Consulting, LLC | Maine Office of MaineCare Services | Merck | Morgan, Lewis & Bockius LLP | NCPDP | OIG | National Association of Chain Drug Stores (NACDS) | Pfizer | Sunovion Pharmaceuticals | Takeda Oncology | Valeant Pharmaceuticals | West-Ward Pharmaceuticals

For more information, please download the complete agenda or visit www.cbinet.com/Medicaid. And remember: Drug Channels readers will save $400 off of the standard registration rate when they use code HRE889 and register prior to April 15th.*

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

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Another Significant Specialty Deal: Cardinal Health Buys Raintree Oncology

Cardinal Health just acquired RainTree Oncology Services, the largest independent group purchasing organization (GPO) for community oncology practices and clinics. Cardinal did not issue a press release because it was a small tuck-in acquisition. So, today's article counts as another Drug Channels exclusive.

The acquisition is another good move for Cardinal and its growing specialty distribution business. Since RainTree is a major player in oral oncology, the deal also features some of the same strategic motivations as McKesson’s acquisition of Biologics.

Read on to learn more about physician practice GPOs and Raintree’s tangled history with Express Scripts and AmerisourceBergen.

The Specialty Pharmacy Accreditation Boom Continues

For 2015, retail, mail, and specialty pharmacies dispensed about $98 billion in specialty pharmaceuticals. Though market share was concentrated among the top companies, even I can’t count the total number of pharmacies dispensing specialty drugs, since any pharmacy can designate itself a “specialty pharmacy.”

A useful proxy for the number of active specialty pharmacies comes from our exclusive analysis of the two primary pharmacy accreditation organizations. We found nearly 400 pharmacy locations than had specialty pharmacy accreditation. As the second chart below shows, the number of accredited specialty pharmacies is still booming.

Specialty pharmacy accreditation is becoming the promised land for pharmacies that want to participate in the networks developed by manufacturers and third-party payers. As more pharmacies can prove that they are special, will that mean that no one is?

The Top 10 Specialty Pharmacies of 2015

Specialty drugs had another year of rapid growth. We estimate that in 2015, retail, mail, and specialty pharmacies dispensed about $98 billion in specialty pharmaceuticals. Below, you can pocket our exclusive list of the 10 largest pharmacies, ranked by estimated revenues from dispensing specialty pharmaceuticals.

Market share for dispensing specialty drugs remains highly concentrated. The top four companies—CVS Health, Express Scripts, Walgreens, and UnitedHealth Group’s OptumRx business—accounted for almost two-thirds of revenues from pharmacy-dispensed specialty drugs. Due to the CVS Health-Omnicare and OptumRx-Catamaran combinations, the top pharmacies’ market share was higher than it was in 2014.

Read on as we cue up our latest update on this booming market.

Demonstrating Value in Price: How to Incorporate New Value Frameworks

eyeforpharma recently conducted a complimentary webinar on Demonstrating Value in Price: How to Incorporate New Value Frameworks. Their panel of industry thought leaders included:

• Michael Kolodziej, M.D., National Medical Director of Aetna
• Steven Paulson, M.D., CEO of Texas Oncology
• Jack Whelan, Cancer Warrior
• Jennifer Hinkel, Partner at McGivney Global Advisors

Much was discussed on establishing a definition for value, finding commonality in what factors play a role in determining price, as well as understanding the key factors in doctors’ and payers’ decision making processes.

The positive feedback was overwhelming, as one attendee states, “This seminar will raise questions throughout the entire country.”

Get your free personal access to help you

• Establish a definition for value
• Attain faster payer approvals
• Hear the most crucial factors in doctors’ decision making process
• Provide patients and payers with higher evidence for your price

Listen to the complete 1-hour webinar now!

eyeforpharma hopes you find the information useful in your work. Watch out – the discussion gets pretty heated!

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Challenges for Managed Care from 340B Contract Pharmacies

The Journal of Managed Care & Specialty Pharmacy (JMCP) has just published my peer-reviewed commentary Challenges for Managed Care from 340B Contract Pharmacies. (Free download.)

As I highlighted last week, the 340B Drug Pricing Program continues its astounding growth. My JMCP commentary explains how the corresponding growth of 340B contract pharmacies raises troubling issues for third-party payers, pharmacy benefit managers, and other managed care participants.

I highlight four crucial ways in which 340B contract pharmacies are disrupting third-party payers’ strategies—whether or not payers realize what’s going on around them. To mitigate these challenges, I argue that managed care should become much more involved in discussions about how the 340B program should be reformed and modernized. Caveat payor!

Read on for the full abstract. Feel free to post comments below.

Surprise PSAO Consolidation: H.D. Smith and AAP Form Fourth-Largest Pharmacy-PBM Negotiating Group

Another day, another channel consolidation play!

Independent pharmacy group American Associated Pharmacies (AAP) and drug wholesaler H.D. Smith are forming Arete Pharmacy Network, a joint venture that combines the organizations’ respective pharmacy services administrative organizations (PSAOs): H. D. Smith’s Third Party Network and AAP’s United Drugs. Click here to read the press release.

PSAOs are crucial but little-known intermediaries that operate between pharmacies and pharmacy benefit managers (PBMs) in our complex U.S. drug channel system. Arete Pharmacy Network is now the fourth-largest PSAO, just behind the PSAOs operated by the Big Three wholesalers. See below for our list of the top 11 PSAOs.

Our research on industry consolidation has highlighted the three key options for smaller players: Get Big, Get Focused, or Get Out. Expect this unexpected deal to trigger even more novel combinations. Read on what comes next.