- Amazon, PillPack, and collective insanity
- For Diplomat Pharmacy, the end is nigh
- Fresh info on Express Scripts’ DIR fees
P.S. @DrugChannels on Twitter is approaching 8,000 followers. Recent tweets have explored generic drug prices, importation, the retail pharmacy shakeout, hospital economics, ICER, Yoda, and more. Follow me for daily insights and cool links.
Amazon Mail-Order Pharmacy Faces Pushback, The Wall Street Journal
Surescripts, which manages electronic prescription data, has accused Amazon’s PillPack business of having improperly obtained patient prescription data. This WSJ article frames the dispute as evidence of the larger battle between Amazon and the drug industry’s incumbents and “the challenges facing Amazon as it tries to rattle the consolidated and highly regulated world of prescription drugs.”
I weighed in with my $0.02 here:
I weighed in with my $0.02 here:
“It’s another example of PillPack and Amazon trying to shortcut the system and finding it’s not as easy to disrupt the health-care industry as it is to sell books by mail or videos online,” said Adam Fein, chief executive of the Drug Channels Institute, a consulting firm. “There’s been a collective insanity about Amazon’s ability to break into the industry. But it’s going to take many many years to penetrate the market.”Disruption is difficult—even for Jeff Bezos and his friends. Beware of the hype machine.
Diplomat Announces Review of Strategic Alternatives, Diplomat Pharmacy press release
Sad but not surprising: Diplomat is now pursuing "strategic alternatives.” That’s Wall Street code for "our strategies have failed, so we'd like to sell at a premium before our value goes to zero." Over the past four years, the company’s stock price has fallen from $50 to $5.
Phil Hagerman and his team deserve immense credit for having turned a family-owned community pharmacy into the largest independent specialty pharmacy and a public company. Alas, the specialty pharmacy market is reaching maturity, as PBMs and insurers dominate specialty drug dispensing channels. Diplomat has been unable to navigate the industry’s evolution.
In 2012, Phil spoke at the Armada (now Asembia) Specialty Pharmacy Summit. I vividly recall his prescient words: “Specialty pharmacy is the new pharmacy.” Phil saw the promised land, but his company may not get to participate in the industry’s future.
For a look back at happier times, check out this upbeat 2014 article from Phil: Diplomat – From FamilyOwned Community Pharmacy to NYSE IPO!
Phil Hagerman and his team deserve immense credit for having turned a family-owned community pharmacy into the largest independent specialty pharmacy and a public company. Alas, the specialty pharmacy market is reaching maturity, as PBMs and insurers dominate specialty drug dispensing channels. Diplomat has been unable to navigate the industry’s evolution.
In 2012, Phil spoke at the Armada (now Asembia) Specialty Pharmacy Summit. I vividly recall his prescient words: “Specialty pharmacy is the new pharmacy.” Phil saw the promised land, but his company may not get to participate in the industry’s future.
For a look back at happier times, check out this upbeat 2014 article from Phil: Diplomat – From FamilyOwned Community Pharmacy to NYSE IPO!
How drug middlemen take back money from pharmacists, Axios
Bob Herman at Axios had a big scoop about direct and indirect remuneration (DIR) payments for pharmacies in Express Scripts’ Medicare Part Network. According to a contract that Bob reviewed, 85% of pharmacies rebated 4% to 6% of the prescription list price to Express Scripts. Here’s what he found:
Is it any wonder that pharmacy owners hate DIR fees? A new GAO report found that in 2016, Part D plan sponsors received $2.3 billion from pharmacies but paid out only $211 million.
The Centers for Medicare & Medicaid Services (CMS) has also sharply criticized the design of current pharmacy DIR computations, as I discuss in CMS Considers Point-of-Sale Pharmacy DIR: Another Prelude to a World Without Rebates?
That said, the story is more complex than the overheated rhetoric you’ll find from pharmacy owners on Twitter. I provide a non-partisan, fact-based overview of pharmacy DIR in Section 11.4. of our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
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Is it any wonder that pharmacy owners hate DIR fees? A new GAO report found that in 2016, Part D plan sponsors received $2.3 billion from pharmacies but paid out only $211 million.
The Centers for Medicare & Medicaid Services (CMS) has also sharply criticized the design of current pharmacy DIR computations, as I discuss in CMS Considers Point-of-Sale Pharmacy DIR: Another Prelude to a World Without Rebates?
That said, the story is more complex than the overheated rhetoric you’ll find from pharmacy owners on Twitter. I provide a non-partisan, fact-based overview of pharmacy DIR in Section 11.4. of our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
Prescription Drug Rebates, Explained, Kaiser Family Foundation
Grab some popcorn: This decent Kaiser Family Foundation video explains how PBM rebates work for brand-name drugs The video unfortunately goes off the rails in final 30 seconds with irrelevant and political-biased material. Oh, well.
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