SPECIALTY RX FACTS

11Aug/110

Charlie Bowlus of ECRM Passes

He was a true friend of mine and the industry and the founder of an extraordinary organization.  When I started consulting many years ago it was Charlie that offered me a hand and access to his event so I could network.  I'll be forever grateful for his wisdom and generosity.  Please say a prayer for his family and the extended family of his legacy, his ECRM employees.
Thank you.

5Aug/110

Pharma leads July job losses

In July, the US pharmaceutical industry shed 13,493 jobs, more than any other sector, according to an updated Challenger, Gray & Christmas report on employment trends by industry. in job losses. Merck’s announced layoffs, totaling 13,000, brought pharma past government as the leading sector for cuts in July, but government is the runaway leader in total job losses for 2010 (106,896) and 2011 (86,980), so far.

Merck’s ongoing job cuts are the result of a restructuring exercise that began after the company’s merger with Schering-Plough. Consolidation usually results in redundancy, but PhRMA, in a statement released in July, worried about cuts from a different hatchet. The Obama Administration, according to PhRMA, is not only overseeing massive job losses in government; it’s also setting up the pharmaceutical industry for a precipitous decline as the private sector employer of choice, with the highest average wages and benefits of any US industry.

“It’s extremely unfortunate that President Obama continues to push for a policy that could destabilize the successful Medicare Part D program and have a devastating effect on American jobs,” said PhRMA vice president Karl Uhlendorf, in a statement. Citing a recent JAMA study, John Castellani, PhRMA’s president and CEO, underscored the link between Part D “price controls” and American jobs. Government price controls could not only affect patients, “it could also be a devastating blow to our economy and further worsen the jobs crisis,” said Castellani.

PhRMA’s statements about the jobs impact of giving CMS the ability to negotiate drug prices, or demand drug rebates for Medicare/Medicaid duel eligibles, reflects the agenda of Chris Viehbacher, current chair of the PhRMA Board and CEO of Sanofi-Aventis, who wants to put more emphasis on industry’s economic contribution. PhRMA data indicates that for every one job created at a pharmaceutical company, another six jobs in adjacent businesses are created. With ongoing consolidations, new generic competition and a gap in pipeline productivity, however, industry’s argument around positive economic impact is likely to receive a skeptical reception, at least in the short term. Industry messaging should instead focus on the social benefits of innovation, its sole remaining virtue in the public realm. With pharma leading the pack in job cuts for July, and a mandate to curb government spending in congress, job creation isn’t likely to be a reputational selling point any time soon. Innovation, on the other hand, offers the promise of life-saving treatments that combat unmet medical needs, a positive message that regular citizens, also known as constituents, can get behind.

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4Aug/110

Wolters Kluwer disengages from pharma market research

The business of analyzing prescriber data is consolidating around IMS Health

Of the three major research companies that collate and mine prescribing data and related market research, two are in the process of merging (with IMS Health acquiring SDI, pending federal approval) and now the third, Wolters Kluwer, is exiting the business altogether. W-K announced that it would divest the pharma part of its Health & Pharma Solutions business, while keeping, and investing in, the Health part that provides clinical decision support, journals and other educational materials. “Moving forward, we are excited about continued opportunities to deliver value to global customers through our portfolio of leading brands in content and clinical decision support, which are well-positioned to benefit from healthcare reform trends globally to support the division's growth strategy," said Bob Becker, president of the health & pharma unit, in a company statement.

Dollar figures were not discussed, but Reuters reported that the company plans to take a €106- million impairment charge (writedown of goodwill) for the divestiture. In 2005, W-K acquired NDC Health for $382 million, adding at the time that the unit was generating revenues of $163 million. (NDC Health focused primarily on prescriber data collection.) Reuters also reported that the W-K will likely sell the pharma business piecemeal; its parts include Source Patient Insights; ProMetis Market Profiler (merging patient, payer and prescriber data); Adis R&D Insight (tracking drug development), drug safety, publishing services and sales training.

If one buys into the proposition that the life sciences industry is becoming more data-intensive and driven by data mining and analytics, the announcement is a surprise. But industry insiders say that W-K tended to be an also-ran, at least for selling prescriber data to manufacturers. Reuters quoted an anonymous industry source saying that the business has been a low-growth, low-margin one for the company. With sales forces shrinking and pharma sales more of a managed-markets business, selling prescriber data on which sales commissions and market forecasts are calculated is trending toward a commodity business; the action has moved on to deeper analytics of patient behavior, payer and outcomes data.

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2Aug/110

Fresenius announces 1.7B deal for Liberty Dialysis Holdings

Fresenius Medical Care, a German dialysis company, announced a $1.7 billion deal for Liberty Dialysis Holdings, Mercer Island, Wash. The deal must be cleared by antitrust regulators and some facilities may be divested to win approval, according to a Fresenius news release. The transaction, which includes debt, is expected to close early next year, according to the release.

Renal Advantage, which operates under Liberty Dialysis Holdings with a second company named Liberty Dialysis, has already received a $300 million infusion from Fresenius, the release noted. Liberty Dialysis Holdings, backed by private-equity firms KRG Capital Partners and Bain Capital Ventures, reported annual sales of roughly $1 billion and operates about 260 clinics, the release said.

Fresenius employed about 77,000 workers and operated about 2,838 clinics including 1,826 in North America as of the end of June, according to the company. Fresenius also announced in the release that it reached a $385 million deal to acquire American Access Care Holdings, a Glen Rock, Pa.-based outpatient vascular care provider for dialysis patients. Antitrust regulators must approve that deal, as well; the acquisition is expected to close by the end of the year. The deal would add American Access Care's 28 outpatient vascular care centers to the 13 operated by Fresenius, according to the release.

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8Jul/110

Rite Aid Shuffles Store Operations, HR Executives

Rite Aid Corp. has made a flurry of executive changes in store operations and human resources. Brian Fiala was named executive VP of human resources, succeeding Steve Parsons, who is leaving the company. Taking over Fiala's former post as executive VP of store operations is Robert Thompson, previously senior VP for the western division. And replacing Thompson is Bill Romine, promoted from group VP for metro New York.

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4Jul/110

CMS to Cover Avastin and Provenge

Avastin Coverage For Now Despite FDA Decision

On June 30, 2011, the Centers for Medicare and Medicaid Services (CMS) made announcements on two important cancer drugs. CMS announced a positive national coverage decision on Provenge for the treatment of advanced prostate cancer. This was expected following the CMS Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) draft guidance released in March of this year. Secondly, a spokesman for CMS said the agency would continue to pay for Avastin for breast cancer treatment even if the Food and Drug Administration (FDA) revokes the drug’s approval for this treatment. However, the CMS spokesman said that while there were no plans for national coverage determination (NCD) on this issue right now, he could not rule out that Medicare might one day undertake a NCD to decide whether to pay for Avastin for breast cancer – this process would take at least a year and involve extensive public input.

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23Jun/110

NABP 107th Annual Meeting Resolutions

Delegates from the member of pharmacy met at the 107th Annual meeting that was held May 21-24th,2011. During the meeting they adopted 5 resolutions. 

  1. Establishing a task force to review the current technology systems in pharmacy practice and recommend revisions to the Model State Pharmacy Act and Model Rules of the NABP to accommodate advances in technology and promote standardization among state laws and regulations
  2. Supporting the development and implementation of a centralized interconnect hub by NABP to facilitate interoperability and data sharing among state prescription monitoring programs
  3. Establishing a task for to recommend revisions to the Model Act to address the responsibility of licensed pharmacies and pharmacists to maintain control over prescription medications and provide workable examples of controls and monitoring measures that can be used to prevent, detect and investigate losses of prescription drugs
  4. Encouraging efforts by the profession to study the primary health care activities in which pharmacists can be engaged and methods by which pharmacists could be incorporated into the medical home model, as well as working with the relevant stakeholders to facilitate a broader understanding of the potential for pharmacists to engage in primary health care activities
  5. A recognition resolution honoring members of the Association who have passed away.
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22Jun/110

Flu Vaccine

Trends in Flu Vaccination

Thanks to changing state laws, the proportion of adults vaccinated in retail stores reached 18.4% during the 2010-2011 season, a jump from 7% in 2006-2007. As of 2009, all 50 states allow pharmacists to administer the flu vaccine; that's up from 22 states in 1999. "Patients trust their pharmacists and find them to be the most accessible providers of patient care," says Steven Anderson, CEO for the National Association of Chain Drug Stores.

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22Jun/110

Walgreen’s drops Express Scripts

Walgreens (WAG) – says contract renewal negotiations with PBM Express Scripts (ESRX) have been unsuccessful. As a result, company is planning not to be part of Express Scripts’ pharmacy provider network as of Jan. 1, 2012. Beginning next year, Express Scripts’ network would no longer include Walgreens 7,700 pharmacies nationwide. Express Scripts processes approximately 90M prescriptions that are expected to be filled by Walgreens in fiscal 2011, representing approximately $5.3B in annual sales.

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18May/110

Why is Fair Market Value important to you?

In a recent issue of Specialty Pharmacy Times, there was a great article about Fair Market Value (FMV). It spoke about the expanding role of health care reform and how it is going to affect data that will be shared between many more health care players. Because the FMV information that will be shared is open to scrutiny by legal entities, there will be more need for independent testing of service fees.

How and why does this affect you? A majority of organizations are either paying for or getting paid for services in the specialty pharmacy industry. Organizations that are being paid for services will need to provide documentation as proof of providing various services.  Also, fees are not allowed to be paid out for referrals or promotions/marketing of products. This affects organizations that are paying for services.

42 CFR 447.502 states that “Bona-fide fees paid by a manufacturer to an entity that represent fair market value for a bona-fide, itemized service actually performed on behalf of the manufacturer that the manufacturer would otherwise perform or contract for in the absence of the service arrangement and that are not passed on in whole or in part to the client or customer of an entity whether or not the entity takes title to the drug.

Are you prepared and ready for FMV?

Quintin Jessee, RPh.

Senior Consultant, D2 Pharma Consulting, LLC

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