Drug Channels News Roundup, September 2017: A Walgreens-Rite Aid Deal Postmortem, Impax Likes Amazon, Health Insurance History, and Gross-to-Net Bubble Emojis

Autumn is here! Curl up with your favorite pumpkin spiced blog and savor these stories plucked from the Drug Channels patch:

• Stefano Pessina of Walgreens Boots Alliance reflects on the successful Rite Aid deal

• A generic drug maker speculates on using Amazon as a direct-to-patient channel

• A great history lesson on why the U.S. has employer-sponsored insurance

Plus, the Pharmaceutical Research and Manufacturers of America (PhRMA) attacks pharmacy benefit managers (PBMs)…with emojis!

P.S. For my daily cornucopia of interesting news stories, follow @DrugChannels on Twitter.

Drug Wholesalers Struggle: Slower Revenue Growth and Lower Gross Margins for 2017

Next week, Drug Channels Institute will release our updated 2017–18 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Below, we highlight the report’s revenue and gross margin trends for the U.S. drug distribution businesses of the Big Three wholesalers—AmerisourceBergen, Cardinal Health, and McKesson.

As you will see, we project that revenue growth in 2017 will be the slowest since 2013. We estimate that core U.S. drug distribution gross margins peaked in 2015 and have declined ever since.

For a sneak peek at the complete report and its content, download the free overview. Enjoy!

Life Sciences ACO & IDN Collaboration Summit

Life Sciences ACO & IDN Collaboration Summit
October 23-24, 2017 | Alexandria, VA
www.worldcongress.com/acocollab

The Life Sciences ACO & IDN Collaboration Summit provides a forum for collaboration to advance ACO, IDN, and life sciences partnerships in population health management.

How will you benefit?

• CMS to provide guidance on regulations, future modeling, and best practices in working within the current system

• Hear firsthand from the C-Suite at ACOs and IDNs as they clearly lay out the opportunities for collaboration in order to improve population health

• Merck Case Study: How ACOs and IDNs are using outcomes research to make decisions on pharmaceutical products

• Geisinger Case Study: Create a systems approach to redesigning primary and specialty care

• Identify key changes that are impacting the sales approaches of manufacturers
  Understand how to align value considerations of ACOs, IDNs, and manufacturers to improve patient outcomes and care coordination

• 6-for-1 ticket pricing! As part of your registration, gain access to any of the co-located events part of the Value-Based Health Care Congress - a 6 track event covering value-based network and contract management, MACRA strategy, ACO strategy, ACO & IDN collaboration, and value-based contracting.

Register today – Use discount code DC200 and save $200!

Visit www.worldcongress.com/acocollab for more information.

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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.

Remicade: A Case Study in How U.S. Pricing and Reimbursement Curb Adoption of Biosimilars

The Centers for Medicare & Medicaid Services (CMS) has just released the Average Sales Prices (ASP) reimbursement data for the fourth quarter of 2017. You can download the drug pricing files here.

Below, I use these data to explore the reimbursement and payer dynamics behind the relatively slow adoption of Inflectra, the first biosimilar of Remicade. The introduction of Renflexis, a second biosimilar, will offer additional insights about pricing and channel strategies.

The U.S. biosimilar market is highly underdeveloped compared with our European counterparts. As this case study shows, it’s pretty, pretty, pretty hard to launch a biosimilar.

CBI’s Gross-to-Net Summit

CBI’s Gross-to-Net Summit
November 15-16, 2017 | Philadelphia, PA
www.cbinet.com/GTN

With the total value of off-invoice discounts and rebates increasing over the last few years, it is pivotal that pharmaceutical and biotech manufacturers stay on the forefront of gross-to-net management. CBI’s GTN Summit, now in the 7th year, is the first step toward positioning your organization for success in the years ahead.

Sessions will focus on strategic GTN forecasting, accounting estimates, data analytics and financial reporting specifically for life science companies. You’ll also hear about health care reform, GTN impacts of coupons and copay programs, revenue recognition based on the new standard, pipeline reserve accruals and much more! You can download the complete agenda here.
In-Depth Workshops and Deep Dive Learning Streams Include:

• Fundamentals of Payer Contracting and Profitable Negotiations
• GTN Channel Profitability and Performance Monitoring
• Models and Simulations for Determining ROI and GTN Impacts
• GTN Efficiency – Digital Capabilities and Robotic Process Automation
• Internal Controls and SOX Compliance
• Accounting & Reporting
• Financial Planning & Analytics
• Contract Strategy & GTN Forecasting

PLUS! Benefit from company-specific content tracks for branded pharma, generics and emerging biotech/new launch.

Visit www.cbinet.com/GTN for further details and to register. Drug Channels readers will save $400 off of the standard rate when they use discount code YKU729 and register prior to October 20th.*

CBI will see you there!

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rate or non-profit 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.

What’s Behind the Slowdown in Specialty Pharmacy M&A Deals?

It looks like specialty pharmacy merger & acquisition (M&A) activity has slowed down.

In 2017 so far, only seven deals involving specialty pharmacies and infusion services companies have been announced. Each is listed below, along with the 10-year M&A trends.

What’s going on? Are buyers skittish over slower specialty industry revenue growth? Are they nervous about the still-unsettled impact of Direct & Indirect Remuneration (DIR) fees? Are the big dealmakers on the sidelines, digesting their previous purchases? Or will we see a surge of deals before year’s end?

Why Manufacturers and PBMs Should Worry About the Growth of Hospital-Owned Specialty Pharmacies

The American Society of Hospital Pharmacists (ASHP) has just released its latest national survey of pharmacy practice in hospital settings. (Free download) I always enjoy this annual treasure trove of insights.

This year’s survey confirms the extent to which hospitals and health systems are pursuing specialty pharmacy dispensing revenues. In 2016, about 1 in 11 hospitals had a specialty pharmacy. However, nearly half of the largest hospitals operated a specialty pharmacy.

Below, I summarize these new data and review hospitals’ motivations for growth. Pharmaceutical manufacturers and pharmacy benefit managers (PBMs) should be wary of the expansion in hospital-owned specialty pharmacies.

CBI’s 9th Federal Pricing and Reporting Summit – VA * DoD * PHS

CBI’s 9th Federal Pricing and Reporting Summit – VA * DoD * PHS
November 16-17, 2017 | Philadelphia, PA
www.cbinet.com/fedpricing

CBI is pleased to invite you to attend the Federal Pricing and Reporting Summit, being held November 16-17, 2017 in Philadelphia, PA. Drug Channels readers will save $400 off of the standard registration rate when they use discount code JQJ962.*

This must-attend event includes updates from government officials and key stakeholders, plus the opportunity to network and learn from industry counterparts. Stay current on processes and requirements of the VA, DoD and PHS to achieve contracting excellence and develop strategies to enhance stakeholder value and engagement in this highly complex market.

You’ll gain actionable insights from in-depth sessions that cover the most compelling topics related to federal pricing and contracting. Some highlights include:

• Updates and insights on VA Structure and OIG Audit Expectations
• Deep Dive into TAA Non-Compliant Covered Drugs Policy
• Key Decisions and Considerations for New FSS Products and Devices
• VA and DoD Risk-Share Agreement Updates and Explorations
• DLA Troop Support Initiatives and best Practices for Medical Stakeholders
• Trends and Development in DoD Pharmacy Benefit Management
• TRICARE Dispute Resolution, Calculations and Refund Management
• Industry Insights on 340B Reporting Challenges and Best Practices for Program Implementation

Perspectives will include updates from the Department of Veteran Affairs, VA Office of Inspector General, DoD DLA Troop Support, and Former DoD Pharmacoeconomic Center, along with strategies and guidance from Acorda Therapeutics, Amneal Pharmaceuticals, Bayer Healthcare, Chiesi, Eisai, Eli Lilly, Genentech, Horizon Pharmaceuticals, Pfizer, King & Spalding, Sidley Austin and Dave Rice Group.

Download the agenda here, and visit www.cbinet.com/fedpricing for further details and to register. Drug Channels readers will save $400 off of the standard registration rate when they use discount code JQJ962.*

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rate or non-profit 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.

2016’s Fastest-Growing, Private Specialty Pharmacies (From the Inc. 5000)

Time for our annual review of the latest Inc. 5000 list, the magazine’s annual ranking of the fastest-growing private companies in the United States. The list offers a valuable snapshot of the dynamic specialty pharmacy industry. This marks our sixth annual review of the list.

We have identified 15 specialty pharmacies on the 2017 list, which is based upon revenue growth from 2013 to 2016. Annual revenues range from $6.4 million to $1.3 billion.

The pharmacies and key stats are listed below. For the nine companies returning from last year’s list, median revenues in 2016 sped ahead by 24%—impressive but slightly slower than last year’s figure.

The specialty industry’s growth is creating a set of large independent specialty pharmacies. Will they keep racing ahead or wipe out?

Life Sciences 2nd Annual Value-Based Contracting Summit

Life Sciences 2nd Annual Value-Based Contracting Summit
October 23-24, 2017 | Alexandria, VA
www.worldcongress.com/valuebased

The Life Sciences 2nd Annual Value-Based Contracting Summit brings together key stakeholders to examine risk sharing strategies to overcome operational challenges and execute successful value-based contracts.

Register today! Use discount code DC200 and save $200! 

How will you benefit?

• Learn about Pfizer's approach on the move from utilization to impact

• Examples of how Aetna operationalized value-based agreements to optimize the care experience

• Understand how value-based arrangements impact provider organizations
  

• Gain insight from payers on what they need from manufacturers when entering into a value-based arrangement
• Analyze how RXAnte and UPMC Health Plan are implementing alternative payment models for prescription drugs
• Understand how to leverage real world data in collaborations between pharma and payers
• Collaborate with fellow attendees to solve challenges associated with operationalizing a value-based contract during our hands-on working group
• Understand the implications on Medicaid, 340B Drug Discount Program, Medicare Part B Program and VA Program
• Ensure transparency in price negotiations with payers and comply with communication guidelines
• 6-for-1 ticket pricing! As part of your registration, gain access to any of the co-located events part of the Value-Based Health Care Congress - a 6 track event covering value-based network and contract management, MACRA strategy, ACO strategy, ACO & IDN collaboration, and value-based contracting.

Register today! Use discount code DC200 and save $200! 

Visit www.worldcongress.com/valuebased for more information.

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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.

The State of Specialty Pharmacy 2017: Reflections from #Asembia17 (rerun)

This week, I’m rerunning some popular posts while I work on the forthcoming 2017-18 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Click here to see the original post and comments from May 2017.

FYI, Asembia's 2018 Specialty Pharmacy Summit will be held on April 29 to May 2, 2018.

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Last week, Paula and I had the pleasure of attending Asembia’s 2017 Specialty Pharmacy Summit in Las Vegas, itself the summit of spectacle. We even met a new friend, as you can see from the photo on the right.

The Specialty Pharmacy Summit remains the most important forum for conducting business in the specialty marketplace. More than 5,000 people learned, networked, and connected at the wonderful Wynn Las Vegas. Thanks to Larry and Robert Irene for creating an annual event that brings the entire industry together. Click here to enjoy the social media action from #Asembia17.

Today marks the seventh year that I will violate Vegas code and tell you what happened there. Below, I offer reflections on key specialty industry trends, DIR fees, patient satisfaction controversies, and a link to the Featured Session slides. You’ll also find a few incriminating photos! Please add your own observations and photos to the comments section below.