Pharmacy Channels delivers timely analysis and provocative opinions on pharmaceutical economics and the pharmacy distribution system. It is written by Adam J. Fein, Ph.D., one of the country's foremost experts on pharmaceutical economics and channel strategy. Pharmacy Channels reaches an engaged, loyal and growing audience of more than 20,000 subscribers. Learn more...

Wednesday, July 18, 2018

Specialty Pharmacies and PBMs Penetrate the 340B Program—And How Manufacturers Should Respond

In two recent Pharmacy Channels articles, I have documented the phenomenal growth in pharmacies participating in the 340B Pharmacy Pricing Program and the superior profits that pharmacies earn from the program.

Today, I turn to the less well-known role of specialty pharmacies and pharmacy benefit managers, which are now significant participants as 340B contract pharmacies. Below, we present our first exclusive analysis of how independent and PBM-owned specialty pharmacies have deepened their relationships with hospitals and other 340B covered entities.

We estimate that nearly 10% of all specialty prescriptions are dispensed by 340B contract pharmacies, which makes this channel one of the fastest-growing components within the 340B program. Despite this growth, pharmaceutical manufacturers have limited transparency into the behavior of these 340B contract pharmacies. Pharmacy makers therefore pay 340B discounts on prescriptions for which they also pay commercial, Medicare Part D, and managed Medicaid rebates.

Below, we explain why manufacturers should have access to the prescription-level data that would permit the identification of 340B claims. Playing Where’s Waldo? for 340B claims is no way for this multi-billion dollar program to operate.

Monday, July 16, 2018

CBI’s 6th Annual Coupon and Copay Summit

CBI’s 6th Annual Coupon and Copay Summit
October 2-3, 2018 | Philadelphia, PA

CBI’s Coupon and Copay Summit begins with their Chairman, Chris Dowd, Executive Vice President, Market and Product Development of ConnectiveRx addressing the state of the marketplace – accumulator programs, pharmacy rebates, rising out-of-pocket costs and the pharmacy pricing debate.

This two-day summit is filled with key issues:
  • Assessing the Impact of Industry Consolidations and Cost Shifts
  • Understanding Key Trends Affecting Market Access, Patient Affordability and the Future of the Pharmacy Pricing Ecosystem
  • Identifying Challenges in Copay Access and Reimbursement from Patient Advocacy, Pharmacy and Manufacturer Perspectives
Click here for the full agenda.
Register by August 10th 2018 and receive $500 off the standard rate with the discount code DCC500.

As the healthcare marketplace continues to evolve, CBI’s Coupon and Copay Summit convenes an exceptional group of industry experts to discuss key market factors affecting the future of copay assistance and copay program design.

Here’s a snapshot of the experts you’ll meet and with whom you’ll benchmark best practices:
  • Chris Boneham, Executive Director, Managed Markets, Aralez Pharmaceuticals
  • Fred Brownfield, Former Director, Pharma Innovative Contracting, Humana
  • David Eskew, Deputy Chief, Criminal Division, United States Attorney’s Office, District of New Jersey
  • Dina Inverso, Strategy Leader, Patient Engagement and Reimbursement, CSL Behring
  • Joseph Mack, Senior Compliance Counsel, U.S. Office of Compliance, Bayer U.S.
  • Philip W. McCreary, Pharm.D., MBA, Medication Access Program Director, Vanderbilt University Medical Center
  • Dennis Murphy, Pharm.D., Manager, Commercial Strategy, Radius Health
  • Peter J. Pitts, Former Associate Commissioner, FDA; President, Center for Medicine in the Public Interest
And much more

Please visit CBI’s site for more information. Register by August 10th 2018 and receive $500 off the standard rate with the discount code DCC500 (an additional $100 off the Advantage Pricing!).

*Discount expires 08/10/2018 and may not be combined with other offers, category rates, promotions, or applied towards an existing registration. Offer not valid on workshop only or academic/nonprofit registrations. Other restrictions may apply.

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

Friday, July 13, 2018

The Trump Administration’s Blueprint: A Preview of the 23rd Annual MDRP Summit

Today’s guest post comes from Jean-Francois Denault, CEO and Owner of Impacts.CA. He discusses the Trump Administration’s Blueprint to Lower Pharmacy Prices and Reduce Out-of-Pocket Costs. He outlines potential changes and their impact on pharmaceutical manufacturers.

Knect365’s 23rd Annual Summit on the Medicaid Pharmacy Rebate Program (MDRP) in Chicago will provide an opportunity to learn more about the administration’s pharmacy pricing plans and such other topics as government pricing, rebates, and regulation. This event is notable for including many government officials along with over 500 industry participants.

Register by July 27 to save up to $400 off the regular registration fee. Visit for more information.

Read on for Jean-Francois’s insights.

Thursday, July 12, 2018

Our Exclusive Analysis: Nearly One in Three U.S. Pharmacies Is a 340B Contract Pharmacy; Five Chains Dominate

Pharmacies continue to profit from the 340B Pharmacy Pricing Program’s explosive growth.

Our latest exclusive analysis finds that about 21,600 pharmacy locations now act as contract pharmacies for the hospitals and other healthcare providers that participate in the 340B program. The total number of locations has grown by 9% over the past 12 months. The five largest retail pharmacy chains—Walgreens, CVS, Walmart, Albertsons/Rite Aid, and Kroger—account for two-thirds of 340B contract pharmacy locations.

This growth is unsurprising. The U.S. Government Accountability Office (GAO) has now documented the tremendous profits available to 340B contract pharmacies. See GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients.

Does Congress really want the 340B program to provide outsize financial benefits to a handful of large, multi-billion-dollar, for-profit pharmacy chains? Should investors be concerned about how much pharmacies are earning from this embattled program?

Tuesday, July 10, 2018

GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients

The United States Government Accountability Office (GAO) has just issued a must-read report on the 340B Pharmacy Pricing Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement.

Some of the report’s most startling revelations confirm our worst fears about how hospitals and pharmacies are abusing the 340B program.

Here are two especially dispiriting findings from the GAO’s analysis:
  • 16 out of 28 hospitals (57%!) did not provide discounted pharmacy prices to low-income, uninsured patients who filled prescriptions at the hospital’s 340B contract pharmacy. Seriously?!?
  • Many 340B contract pharmacies can earn excessive profit margins of 15% to 20% from brand-name 340B prescriptions. As I have long suspected, large, publicly-traded pharmacies are sharing in the 340B discounts generated for covered entities.
Bottom line: Hospitals and pharmacies are making money from poor people. Are you kidding me?!? For shame!

The 340B program’s apologists will have a hard time rebutting the uncomfortable facts from this GAO report. Calling something a “pharmacy discount program” apparently doesn’t mean that the neediest patients get access to those discounts. Read on, and prepare to be outraged.

P.S. In two upcoming articles about 340B, I’ll review the pharmacies participating in the program and then examine the role of specialty pharmacies and pharmacy benefit managers.

Monday, July 09, 2018

2nd Annual Pharma Digital Marketing & Multichannel Integration Summit

2nd Annual Pharma Digital Marketing & Multichannel Integration Summit
September 13-14, 2018 | Boston, MA

Join industry innovators at the 2nd Annual Pharma Digital Marketing & Multichannel Integration Summit, September 13-14, in Boston, MA as they share how to deliver information to customers in a way that is tailored to them, through their preferred channels. The agenda is structured to provide solutions to common problems felt by today’s pharma marketers and empower attendees to return to the office with innovative strategies and tangible takeaways to enhance the customer experience and drive business results.

Key Topics in 2018 include:
  • Applying innovative technologies such as virtual reality (VR) and augmented reality (AR) to your marketing campaign
  • What the pharma industry can learn from Amazon’s marketing tactics
  • Building a data-driven marketing strategy
  • Utilizing digital health to transform patient care
  • Evolving your organization’s culture to transform the customer experience.
The expert speaker faculty includes representatives from:
Amazon Web Services, AZ, GSK, Merck, Novartis, WEGO Health, eHealth Initiative, BMS, Lilly, and many more!

Register with discount code DC200 and save $200 on rates.

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

Tuesday, July 03, 2018

Democrats and Republicans Agree: Pharmacy Channels Is Awesome!

I can’t recall any period in my life when our country has been so divided and polarized.

So just in time for our nation’s birthday, I’m happy to report some good news. When it comes to healthcare analysis, both Republicans and Democrats can agree on one thing: Pharmacy Channels is the go-to source!

Each political party’s major pharmacy pricing policy document draws prominently from our research and writing. See below for the patriotic details of this historic bipartisan validation.

Through the Pharmacy Channels Institute, I strive to provide you with fact-based and balanced coverage. I’m proud that your friendly neighborhood blogger can be a unifying force for our troubled nation.

Monday, July 02, 2018

CBI’s 4th Annual Compliance Congress for Specialty Products

CBI’s 4th Annual Compliance Congress for Specialty Products
September 13-14, 2018 | Boston, MA

CBI’s 4th Annual Compliance Congress for Specialty Products explores the unique compliance challenges for specialty bio/pharmaceutical companies, pre- and post-commercialization.

While specialty products are immensely valuable to patients, they also bring unprecedented risks for manufacturers. A comprehensive compliance program is essential to correctly assessing risks, including patient assistance programs, non-commercial activities, third-party relationships and pharmacy contracting.

At this meeting, take the opportunity to identify and address the top risk areas for specialty product manufacturers and compare strategies for promoting a compliant culture within your organization.

Register by 7/27/2018 and receive $400* off the standard rate with discount code SPC400.

Valuable Insights from 35+ Thought Leaders, Including:
  • Gregg Shapiro, Assistant U.S Attorney, Chief of Affirmative Civil Enforcement Unit, U.S Department of Justice (Boston)
  • Charles Graybow, Assistant U.S. Attorney, U.S. Attorney's Office, District of New Jersey
  • Bill Hrubes, Vice President, Chief Compliance Officer, ACell, Inc.
  • Shoshanna Clark, Head of Operations, NA Ethics & Business Integrity, Sanofi
  • Alessandra Ravetti, Executive Director and Assistant General Counsel, Regeneron Pharmaceuticals, Inc.
  • Trish Shorey, Privacy Officer, Global Compliance and Risk Management, Shire
  • Heidy Abreu, Vice President, Legal and Corporate Secretary, Axcella Health, Inc.
  • Kelly Pitt, Director, Legal & Compliance, Sobi, Inc.
  • Amy Wilson, MBA, MSJ, Director, Enterprise Compliance, Alexion Pharmaceuticals
  • Alessandro Martuscelli, Chief Global Therapeutics Counsel, Bioverativ
  • Chad Morin, Senior Director, Healthcare Compliance, bluebird bio
  • Brian Conner, Vice President, Head of Corporate Compliance, Strongbridge Biopharma plc
  • Sarah Whipple, Senior Corporate and Compliance Counsel, Akebia Therapeutics, Inc.
  • David Ryan, Vice President, Associate General Counsel, Chief Compliance Officer, Haemonetics Corporation
Key Reasons to Attend:
  • Create a balance between effective patient assistance programs and maintaining compliant practices
  • Address the legal issues related to “proactive” versus “reactive” presentations around disease state
  • Gain insight into operational safeguards around copay assistance and charitable donations
  • Determine if a nurse educator program is necessary and where it should sit within the organization
  • Review current and pending state transparency and disclosure legislation
  • Assess the controls that compliance or legal need to put in place to ensure that value-based agreements comply with the Anti-Kickback Statute
  • Examine the changes in E.U. privacy laws and discuss why it matters to U.S. companies
Register by 7/27/2018 and receive $400* off the standard rate with discount code SPC400.

*Offer expires July 27, 2018; applies to standard rates only and may not be combined with other offers, category rates, and promotions or applied to an existing registration.

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

Friday, June 29, 2018

Amazon Buys PillPack: Six Pharmacy and Pharmacy Channel Implications

It’s official! After more than a year of speculation and rumors, Amazon has entered the pharmacy business with its acquisition of PillPack, a small mail pharmacy. Consider this move to be the end of the beginning for the pharmacy industry's evolution.

The stock prices of pharmacies and pharmacy benefit managers (PBMs) predictably plunged yesterday as everyone freaked out. CVS Health, Walgreens Boots Alliance, and Rite Aid collectively lost more than $11 billion in stock market value.

Below, I offer my initial observations on the transaction and its impact.

But let’s all keep some perspective here. This is a small first step that will let Amazon begin growing a pharmacy dispensing business.

We are still a long, long way from a fundamental restructuring of the complex U.S. pharmacy channel. The incumbents still have opportunities to defend their position, capture value from internet technologies, and streamline distribution. However, the prospects of a retail pharmacy shakeout over the next 10 years have just increased.

Thursday, June 28, 2018

Why Retail Pharmacies Still Overcharge Uninsured Patients—And What That Means for Amazon (rerun)

This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from April 2018.

Consumer Reports recently published a fascinating survey of pharmacies’ cash prices for five common generic pharmacy prescriptions.

The results were startling. Prescription prices ranged from $66 to $1,351—a nearly 2,000% difference. The big three retail pharmacystore chains—CVS, Walgreens, and Rite Aid—consistently had higher average prices compared with those of other pharmacies. Independent pharmacies had some of the lowest prices, but also some of the highest prices.

Our analysis of prescription profits highlights the pharmacy industry’s unfortunate pricing strategy for cash-pay prescriptions. Average profit margins ranged from $8 to $264 per prescription for the five pharmacys. We can only hope that consumers didn’t pay the pharmacies’ sky-high cash prices.

The results expose the insane soak-the-poor mentality baked into the U.S. pharmacy industry’s historical pricing models. The data also highlight the potential pharmacy opportunity for Amazon.

P.S. Before other states follow Maryland and pass laws against price gouging by generic manufacturers, perhaps they should take a closer look at the behavior of their own states’ pharmacies.

Wednesday, June 27, 2018

Meet The Power Buyers Driving Generic Pharmacy Deflation (rerun)

This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from February 2018.

Wholesalers and retailers have deepened their relationships via generic purchasing consortia—and generic pharmacy makers are feeling the pain. Example: Novartis’ Sandoz business unit reported that its fourth-quarter 2017 sales dropped by 17% "due to increased industry-wide pricing pressure and continued customer consolidation.” (source)

Below, we examine the four generic pharmacy mega-buyers behind this pressure: Red Oak, Walgreens Boots Alliance, McKesson and ClarusOne, and Express Script’s EconDisc.

We estimate that in 2017, these four organizations accounted for an astounding 90% of total U.S. generic pharmacy purchases from manufacturers. Read on for our market share estimates, business profiles, and the outlook for 2018. Spoiler alert: The forecast calls for generic pain.

Today’s post is a sneak peek at our forthcoming 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. The new edition will be bigger than better than ever. Look for it on February 27!

Tuesday, June 26, 2018

The Gross-to-Net Bubble Topped $150 Billion in 2017 (rerun)

This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from April 2018. 

You can also reach this post at ;)

In 2017, the gross-to-net bubble—the ever-growing pile of money between a manufacturer’s list price for a pharmacy and the net price after rebates and other reductions—hit a new high.

Based on new data from IQVIA, manufacturers of brand-name pharmacys in 2017 reduced list price revenues by an astonishing $153 billion. Those reductions came primarily from rebates, discounts, and other payments to the pharmacy channel. That figure has grown by 10% from the 2016 figure, even though net prices for brand-name pharmacys grew by only 1.9%.

We can no longer ignore the warped incentives created by our bubble buddy. As regular readers know, I think plan sponsors and insurers should be more transparent about what they do with the billions collected via pharmacy benefit managers (PBMs) from manufacturers—or even be forced to pass through these rebates to point of sale. Read on and let me know what you think.