Drug Channels News Roundup, May 2019: Express Scripts’ New GPO, More on Amazon/PillPack, a BS Update, and Vegas Video

Summer is unofficially here! Before you break out the grill, check out these officially noteworthy items:

• Why did Express Scripts launch a GPO … in Switzerland?

• Behind the scenes of Amazon’s deal for PillPack

• More on BS in healthcare

Plus, a fun video recap from Asembia’s 2019 Specialty Pharmacy Summit—including some footage of your friendly neighborhood blogger!

P.S. Follow my daily musings and links to neat stuff at @DrugChannels on Twitter.

With Ascent Health GPO Cigna Plays Offense on Tax, Defense on the Move to Discounts, Nephron Research

Nephron Research broke the story on Ascent Health Services, LLC. It’s a Switzerland-based group purchasing organization (GPO) that Express Scripts has just launched.

There appear to be at least two motivations for this move:

• Tax efficiency due to transfer pricing and rebate accounting using Swizterland’s lower corporate tax rate

• Leverage GPO safe harbor rules to avoid rebate reform and enable Express Scripts to collect GPO admin fees 

It’s an intriguing move. Here’s an excerpt from the Nephron Research report. (Sorry, the full report is available only directly from Nephron.)

[Click to Enlarge]

The inside story of why Amazon bought PillPack in its effort to crack the $500 billion prescription market, CNBC

Chrissy Farr at CNBC provides a deep dive into Amazon’s $753 million purchase of PillPack. The article does concede that the pharmacy business “won’t be an easy market for Amazon to win.” (You don’t say!) The article also states that PillPack was “on track to generate $299 million in annual revenue” for 2018. That’s higher than other figures that have been reported.

Aim your baloney detector at the BS in health care, STAT

In this entertaining and useful article, two really smart Wharton professors—Mark Pauly and Lawton Burns--look at the growing BS problem in healthcare. Remember this article the next time you hear fresh hyperbole about big data, synergy, disruption, and other buzzwords. As the authors warn:

“The incentives to generate BS are not likely to diminish—if anything, rising spending and stagnant health outcomes strengthen them—so it is all the more important to have an accurate and fast way to detect and deter BS in health care.”

Asembia’s 2019 Specialty Pharmacy Summit Highlights, Vimeo

Check out this fun video from the 2019 Specialty Pharmacy Summit in early May. It even includes a few seconds of my chat with the inspiring Maria Shriver.

You can read my recap of the meeting here: The State of Specialty Pharmacy 2019: Industry Trends and Photos from #Asembia19.