Drug Channels News Roundup, June 2019: PBM Spread Pricing, Rebate Walls, Reforming Part D, and Not-So-Smart Bulbs

Happy 243rd birthday, America! Before you launch your July 4 festivities, Drug Channels offers some fireworks of its own:

• Surprising PBM spread pricing profits in Massachusetts plans

• Eli Lilly explains rebate walls for specialty drugs

• MedPAC suggests Part D changes—and endorses a well-known Drug Channels term!

Plus, the funniest video that I have ever seen.

P.S. @DrugChannels on Twitter now has more than 7,700 followers. See why by following my daily musings and cool links.

A CVS Lawsuit Uncovers Three Surprising Revelations about Amazon’s PillPack Strategy

Last week, a judge in Rhode Island issued a decision in CVS Pharmacy, Inc. v. John Lavin. Briefly: CVS had sued Lavin, who had been a senior vice president responsible for CVS Caremark's retail network contracting. Lavin had left CVS to work for Amazon’s PillPack business. CVS successfully argued that Lavin had violated the terms of his non-compete agreement

Below, you’ll find links for the public documents in the case.

I also highlight three surprising disclosures that arose in the decision. These shed light on PillPack’s contracting strategy with payers, its not-quite-disruptive plans for pharmacy benefit management, and its alleged attempts to get retail pharmacy reimbursement rates.

We’re all expecting Jeff Bezos to pull a rabbit out of his hat, but Amazon’s disruption may be different—and take longer—than many people expect.

CBI’s 5th Annual 340B Manufacturer Summit

CBI’s 5th Annual 340B Manufacturer Summit
August 20-21, 2019 | Alexandria, VA
www.cbinet.com/340BManufacturer

Given the increasing industry uncertainty and complex market dynamics, ensuring 340B program integrity has never been more paramount. Later this summer, CBI’s 340B Manufacturer Summit will bring you solutions to the most pressing challenges.

Visit www.cbinet.com/340B for further details and to register. Drug Channels readers will save $300 off the standard rate when they use discount code EYA692 and register prior to July 19th.*

Benefit from Interactive Discussions and Benchmarking with Multi-Stakeholder Perspectives Addressing:

• 340B program developments and anticipated future rulings
• 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties (CMP) regulation
• Impact of HHS proposed reform and significance of the final rule
• Best practices for preventing revenue leakage
• Covered entity and contract pharmacy challenges and strategies for collaboration
• Relevant case studies showcasing manufacturer successes and lessons learned

Can’t Miss Spotlight Session: Critical Updates on Government Initiatives within 340B

• Delivered by Jeff Lucas, Health Policy Advisor, United States Senate

Plus, Choose Between Two In-Conference Workshops:

• 340B Boot Camp — A 101 Primer on Program Intricacies and Regulatory Guidance
• Senior-Level Think Tank— Best Practices to Improve Compliance and Prevent Revenue Leakage

Download the agenda here and prepare to return to the office armed with critical updates and valuable takeaways.

2019 is a year for change for the 340B program. It is essential now more than ever that manufacturers are ensuring compliance amid the integrity of the program being called into question. Join CBI to ensure that you are equipped with best practices for what the future holds.

Visit www.cbinet.com/340B for further details and to register. Drug Channels readers will save $300 off the standard rate when they use discount code EYA692 and register prior to July 19th.*

CBI will see you there!

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates, clinic/hospital rates, non-profit rates other offers. 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.

New 340B Health Reports Confirms the Program’s Size—But Double-Dips on Hospitals’ Community Benefit Obligations

340B Health, which lobbies for hospitals that participate in the 340B Drug Pricing Program, recently issued an eye-opening member survey. It found that 340B Health’s member hospitals reported total 340B discounts of $15.3 billion. (Details below.)

Hmm. That’s pretty darn close to our estimate of $14.9 billion, shown in 340B Program Purchases Reach $24.3 Billion—7%+ of the Pharma Market—As Hospitals’ Charity Care Flatlines. It looks like 340B Health has perhaps inadvertently validated our computations of the program’s size.

The 340B Health report also claims to show evidence that hospitals are properly using 340B funds.

In reality, the report merely affirms that hospitals are spending money to meet their fundamental legal and statutory community benefit obligations. Any money from 340B discounts shouldn’t be double-counted to meet hospitals’ fundamental spending requirements.

This latest report therefore again highlights the need for transparency and accountability to ensure that billions in 340B discounts are shared with the patients whose prescriptions generated those funds.

Meet the Top Ten Drugs of 2024 (Maybe)

The professional prognosticator EvaluatePharma recently released its World Preview 2019, Outlook to 2024 report, which projects prescription drug sales and R&D activity in the U.S. and abroad. (The report is free with site registration.)

You’ll find predictions for the ten best-selling U.S. drug products on page 24. Below is my handy summary chart comparing the 2024 list along with each product’s 2018 sales. For fun, I have also compared the 2018 actual sales with EvaluatePharma’s projections from 2013.

The figures should make us all humble about our ability to project the future. For many products, the EvaluatePharma figures sharply underestimated actual growth rates from 2013 to 2018. The projections to 2024 show that growth will accelerate, which to me suggests an overestimation of future growth. Notably, EvaluatePharma predicts that Humira will retain its sales lead, despite forthcoming biosimilar competition.

These projections, while useful, remind us of another valuable lesson: Good forecasters may not be smarter than everyone else—they merely have their ignorance better organized.

PBM Contracting 2019

PBM Contracting 2019
August 21-22, 2019 | Hilton Magnificent Mile Suites | Chicago, IL
www.cbinet.com/PBMContracting

Now in its 5th year, CBI’s PBM Contracting provides you a great opportunity to gather the most timely information, best practices, and innovations relating to pharmacy benefit management contracts. Unravel the many complexities surrounding the rapidly evolving PBM contracting landscape. You won’t want to miss powerful co-presentations, panel discussions, facilitated networking opportunities, and diverse perspectives on the changing industry dynamics impacting PBM contracting.

Drug Channels readers save $400 off the standard rate when you register and use discount code RXK565.

Hear the latest insights and innovations from industry thought-leaders:

• Arlene Edlin, General Manager, Sales, Navitus Health Solutions
• Garrett Brown, Assistant General Counsel, Employers Health Coalition
• Natasha Davis, Senior Pharmacy Benefits Manager, North Carolina State Health Plan
• Ben Daniels, Special Counsel, Foley and Lardner, LLP
• Brandy Millen, Consulting Actuary, Milliman
• Molly Breimhorst, Vice President, Financial and Analytical Services, PSG
• And more!

Navigate the changing landscape and collaborate with peers on cutting-edge strategies:

• Keep pace with regulatory requirements for PBM contracting
• Benefit from a birds-eye view on the current regulatory status of drug manufacturer rebates
• Gain tips on thinking outside-of-the-box for development of your prescription benefits plan design and contracts
• Discover trends in what PBMs are offering in contracts
• Review the structure of a PBM agreement and assess plans for oversight and monitoring
• Discuss prescription drug plan pricing and PBM fees
• Analyze how rebates are defined, potential trends and future of point of sale rebates
• Provide actionable strategies for plan sponsors to optimize return on drug spending

Request the full agenda and reserve your seat for this important meeting today.

Plus! Drug Channels readers are entitled to an exclusive $400 discount! Just register using discount code RXK565 to receive $400 off* the standard rate when you sign up.

*Offer applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to an existing registration. Offer not valid academic/non-profit registrations.

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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.

CVS Health: Will This Giant's Scale and Scope Confound Its Vision for Healthcare?

Last week, CVS Health held its annual investor day. (Links below.) In the aftermath of the Aetna transaction, CVS Health has become a uniquely diverse organization with revenues exceeding $250 billion.

As expected, CVS Health management explained the cost-cutting synergies that it expects from having united CVS Health and Aetna. It also laid out a long-range vision for generating value—and operating income—from making the disparate pieces of its empire work together in new ways. CVS Health called these new products and services “transformational initiatives.”

Below, I summarize investor day high points concerning CVS Health’s overall strategy, offer thoughts on the challenges facing the HealthHUB store concept, and highlight the headwinds and tailwinds affecting the company’s major business segments.

I commend CVS Health’s management for their willingness to take giant steps toward a bold vision. But I wonder if its transformation will scale with the speed and efficiency needed to generate superior returns for CVS Health and its investors. And along the way, how much margin will the company sacrifice to preserve its novel business combination?

CBI's Reimbursement and Access 2019

Reimbursement and Access 2019
August 13-14, 2019
DoubleTree by Hilton Center City | Philadelphia, PA
www.cbinet.com/Reimbursement

CBI’s Reimbursement and Access conference returns for the 7th year and takes place August 13-14, 2019 in Philadelphia, PA. This event arms attendees with real-time policy briefings, impactful managed market trends and strategies to ensure product access.

Drug Channels readers: use discount code QEF679 and save $500* off the standard rate when you register by July 19, 2019.

Below is a first look at the robust lineup of esteemed thought-leaders driving this year’s dialogue.

• Christina Sandefur, Executive Vice President, Goldwater Institute
• Jeff Henderson, Vice President, Head of Market Access and Government Affairs, Sobi, Inc.
• J. Gabriel McGlamery, J.D., Senior HCR Policy Consultant, Florida Blue
• Tami Carten, Executive Director, Market Access, Braeburn
• Gregory Gierer, Senior Vice President, Policy, AHIP
• Alex Keeton, Director, Policy Research and Analytics, BIO
• Christina Simmons, Senior Corporate Counsel, Pfizer Inc
• Ross Margulies, Associate, Foley Hoag LLP
• Stacey Worthy, Counsel, Aimed Alliance
• Kollet Koulianos, MBA, Senior Director, Payer Relations, National Hemophilia Foundation
• William Daniels, Director, Business and Market Segment Development, Conduent
• Douglas Neely, CMPE, Head, Global Market Access, Athenex Oncology
• Rujul Desai, Of Counsel, Covington & Burling LLP
• Colette Flack, Senior Director, Patient Support Services, Dermira
• Jesse C. Dresser, Esq., Partner, Frier Levitt, LLC
• Anthony Scicchitano, Assistant U.S. Attorney, U.S. Attorney’s Office for the Eastern District of Pennsylvania
• Stuart Bell, Vice President Consulting, Medicines Access, Inceptua Ltd
• Molly Burich, MS, Director, Public Policy – Biosimilars and Reimbursement, Boehringer Ingelheim
• Everett Crosland, Vice President, Market Access, Reimbursement and Government Affairs, AppliedVR
• Andy Molnar, Senior Director, Market Access, Cognoa

Request the full agenda and reserve your seat for this important meeting today.

Plus! Drug Channels readers are entitled to an exclusive $500 discount! Register using discount code QEF679 and save $500* off the standard rate when you sign up by July 19, 2019.

*Offer expires 7/19/19; applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to an existing registration. Offer not valid academic/non-profit registrations.

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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.

Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Time to dive into our 12th (!) annual review of the Fortune 500 list. Every year, this is one of my most popular posts, because it helps us follow the dollar and understand how drug channel intermediaries make money.

Fortune’s 2019 list contains only six drug channel companies: AmerisourceBergen, Cardinal Health, CVS Health, McKesson, Rite Aid, and Walgreens Boots Alliance.

Consolidation and vertical integration have transformed the channel—and the Fortune rankings. Below you will see our list of the companies that disappeared from the roster. We therefore have added to our analysis the four managed care and insurance companies on the list that operate PBMs.

Using the Fortune data, I explore the profitability and shareholder returns of the largest drug channel and managed care companies. I compare these companies with the Fortune 500’s eleven pharmaceutical manufacturers and with a separate survey of independent pharmacies.

These data remind us that many multi-billion-dollar businesses profit as drugs move through the U.S. reimbursement and distribution system. Enjoy our swim through this crazy complexity.

Medicaid Drug Rebate Program Summit 2019

Medicaid Drug Rebate Program Summit 2019
September 23-25, 2019
Renaissance Chicago Downtown | Downtown Chicago, IL

Join KNect365 for the 24th year of MDRP this September 23-25, 2019 at the Renaissance Chicago Downtown in Downtown Chicago, IL. This is your opportunity to benchmark best practices and gain solutions to overcome new operational challenges brought on by AMP Final Rule, 340B, Medicare Part B, Medicare Part D coverage gap, FSS, VA, OIG, and other critical government programs.

See why this is an event you can’t afford to miss!

Register Now and use Priority Code P19MDRPDRUG to
SAVE an additional $200 off the current rates (a total of $800 in savings!)

Year after year, MDRP Chicago continues to be an important gathering for everything pricing, rebates, contracting, and collaboration. Ensure you have the most comprehensive educational experience over three days with access to government officials creating regulatory rules, the industry leaders interpreting them, and the pharmaceutical executives implementing them.

Collaborate with your peers and benchmark best industry practices:

• Navigate Regulatory Hurdles with Comprehensive Coverage of Topics including:
• State Drug Pricing Transparency
• Case Study on Value-Based Contracting
• Innovative Bundling
Calculations & Reporting Requirements: Challenges and Innovative Solutions
• Principles of Reimbursement & Contracting Strategy
• GTN: Finance, Accounting & Accruals
• 340B Policy and Process
• Analytics and Technology
• Rebate Operations and Disputes
• Generics and Biosimilars

• MDRP’s top-notch speaking faculty includes industry leaders you need to hear from:
• Krista Pedley, PharmD, MS, CAPT, USPHS, Director, Office of Pharmacy Affairs, Healthcare Systems Bureau, Health Resources & Services Administration (HRSA)
• John D. Shakow, Partner, King & Spalding will provide insights into Medicaid and the changing landscape with the current Administration.
• Alice Valder Curran, Global Regulatory Practice Group Leader, Hogan Lovells
• Scott Atlas, MD, David and Joan Traitel Senior Felloe, Hoover Institution, Stanford University
• External Counsel Roundtable: The State of MDRP - featuring Christopher H. Schott with Hogan Lovells, John D. Shakow with King & Spalding, and Jeff Handwerker with Arnold & Porter Kaye Scholer LLP.

MDRP offers attendees the opportunity for face-to-face meetings between states and manufacturers during our exclusive Dispute Resolution Meetings. These one-on-one meetings can help you realize millions in potential savings!

For 2019, MDRP have a record 21 confirmed states and counting: Alaska, Arizona, Arkansas, Colorado, Georgia, Idaho, Indiana, Kentucky, Maryland, Michigan, Nevada, New Hampshire, New York, North Carolina, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, Wisconsin.

Stay ahead of the curve by getting the best networking, education, and technology at MDRP Summit 2019

Click Here to Register Now and SAVE an additional $200 off the current rates. Be sure to use Priority Code: P19MDRPDRUG.

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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.