- Five Industry Trends for U.S. Drug Wholesalers in 2017 (drugchannels.net)
Here are five significant industry trends that will substantially impact the drug wholesaling industry in the coming years.
- U.S. pharmaceutical spending – and drug prices – are still growing. - We project that in 2016, for the first time, the Big Three wholesalers’ combined drug distribution revenues will exceed $400 billion.
- The consolidation of pharmacy and provider markets shows no sign of slowing - Mergers and acquisitions among pharmacies and payers are pressuring wholesaler margins, especially as the acquiring companies consolidate buying power.
- Payers and manufacturers are narrowing drug channels, pressuring wholesalers’ profitability - Narrow pharmacy networks – either preferred or limited models – are now a widely accepted element of pharmacy benefit design.
- Large pharmacies have entered into multifaceted partnerships with wholesalers – This...consolidation is creating a channel supply alignment among the largest wholesalers, largest PBMs and largest retail chains.
- Biosimilars are unlikely to provide superior profits to wholesalers. - Competition between a biologic drug and biosimilar is therefore likely to resemble brand-to-brand competition rather than brand-to-generic competition.
- Merck wins $2.54 billion in hepatitis C drug trial against Gilead (reuters.com)
Merck & Co...was awarded $2.54 billion in royalties by a federal jury in a patent lawsuit against Gilead Sciences Inc over Gilead's blockbuster hepatitis C drugs Sovaldi and Harvoni...The jury in Delaware reached the verdict following a nearly two-week trial, finding that a patent acquired by Merck in 2014 on hepatitis C treatments was valid...Harvoni and Sovaldi have drawn attention for their breakthrough success in curing hepatitis C in more than 90 percent of patients, and for their high cost...Harvoni's list price is $1,125 per pill and $94,500 for a 12-week regimen. Foster City, California-based Gilead, one of the world's largest biotechnology companies, made nearly $20 billion on the two drugs in 2015.
- Pharmacy Week in Review: December 16, 2016 (pharmacytimes.com)
Kelly Walsh, PTNN. This weekly video program provides our readers with an in-depth review of the latest news, product approvals, FDA rulings and more.
Merck KGaA has taken a page from consumer packaged goods’ playbook for its consumer OTC marketing strategy—and it's working...The German-based maker of a $1 billion portfolio of healthcare brands refers to the strategy as creating “lovebrands,” in a recent report on the companywide success of its new approach. The familiar consumer-goods strategy builds brand identities that not only depend on the technical or functional assets of the product, but also create an emotional benefit or connection with consumers...The word Merck uses—“lovebrand”—is associated with...Kevin Roberts, who wrote the book Lovemarks about the ways brands can transcend even loyal consumer status to become loved by people...Merck uses the strategy across all six global consumer brands and also its five or six regional brands...and is looking at how to use it with its local brands. The consumer-driven strategy hasn't been picked up by Merck’s pharma prescription drugs as of yet...The Merck consumer brands under the long-term strategy have “grown significantly in the past two to three years," and consumer perception, attitudes and awareness of the brands have also been increasing…The consumer-style brand strategy isn't meant to take away from the products' technical or scientific strength...We take our strong scientific and medical expertise and add that (lovebrand) component on top and that makes us stronger...
- NACDS hails rule relaxing access to pharmacy rewards (chaindrugreview.com)
The Department of Health and Human Services is giving pharmacies more flexibility to extend their reward and loyalty programs to beneficiaries in government programs such as Medicare and Medicaid…it will allow government program beneficiaries to enjoy access to programs voluntarily implemented by pharmacies, which reduce health care costs, improve quality and promote patient health...This is a very positive step forward for pharmacy patient care...and of the expanded innovative programs that pharmacies provide...Programs vary in their designs but often include cost savings or other rewards for filling prescriptions or engaging in other health-related activities, such as health screenings, medication adherence programs or healthy lifestyle behaviors…
- New Data Show Prescription Profits Under Pressure at Independent Pharmacies (drugchannels.net)
I review our latest estimates on pharmacy economics and margins. The data reveal that independent pharmacy owners are starting to perform poorly. In 2015, the average pharmacist owning a single pharmacy earned about $200,000. It’s the second year in which the average owner’s compensation declined. The number of independent pharmacies and gross margins also are trending downwards...independent pharmacies are under-performing with generic substitution…
SIX OBSERVATIONS ON THE 2015 DATA
Overall independent pharmacy profit margins have remained stable.
Independent pharmacies’ prescription profit margins are trending downward.
Independent pharmacies’ gross profit per prescription was stable.
Independent pharmacies have lower generic dispensing rates.
The average pharmacist owning a single pharmacy earned about $200,000 in 2016—down for the second year.
- FDA Says Real-World Evidence Could Generate ‘Incorrect or Unreliable Conclusions’ (raps.org)
...top Food and Drug Administration officials published an article in the New England Journal of Medicine (Real-World Evidence — What Is It and What Can It Tell Us? )...calling into question some of the potential uses of real-world evidence but also acknowledging that real world research and the concepts of a planned intervention and randomization “are entirely compatible."...while acknowledging that such (real-world) evidence “can inform therapeutic development, outcomes research, patient care, research on health care systems, quality improvement, safety surveillance, and well-controlled effectiveness studies,” the authors caution that “the confluence of large data sets of uncertain quality and provenance, the facile analytic tools that can be used by nonexperts, and a shortage of researchers with adequate methodologic savvy could result in poorly conceived study and analytic designs that generate incorrect or unreliable conclusions...“Accordingly, if we are to realize the full promise of such evidence, we must be clear about what it is and how it can be used most effectively, and we must have appropriate expectations about what it can tell us,”...
- Hospital Impact: Drug companies win, patient safety loses with 21st Century Cures Act (fiercehealthcare.com)
The 21st Century Cures Act passed the House and Senate with overwhelming bipartisan support and has now been signed into law...On its surface, there seems to be little controversy in supporting more funding to the National Institutes of Health for innovative research, more expeditious approval of promising drugs by the Federal Drug Administration, and better approaches to combat the opioid abuse epidemic...However, there are a number of troubling provisions in this potential law of which the public should be aware...To outline the advantages and concerns, I created a series of winners and losers from which readers can draw their own conclusions:
- Winners
Drug companies: It shouldn’t surprise anyone that the pharmaceutical industry is ecstatic over the law, as the bar for approval of drugs under development is made significantly lower by reducing the rigor required for approval of new drugs by the FDA. Traditionally, rigorous double-blinded peer review studies are required prior to consideration and approval. - Losers
The FDA: Already stymied with deteriorating labs, under staffing and somewhat compromised approval processes for new drugs and medical devices, the FDA is not expected to fare better under the new law...Lowering the bar for the rapid and expeditious approval of pharmaceutical and medical device products with expansion of off label uses will only further undermine the FDA’s ability to protect the public from potential harm...Evidence-based medicine: The law allows for the use of “real-world evidence”—which may include anecdotal studies or observations, patient or professional opinion, as well as non-validated or scientifically measured outcomes—to justify the approval of a new treatment product...pharmaceutical companies will only be required to submit a “data summary” for new pharmacological agents or new indications to existing products, which will make the introduction of new products far easier.
- Winners
- This Week in Managed Care: December 16, 2016 (ajmc.com)
Laura Joszt with The American Journal of Managed Care. Welcome to This Week in Managed Care, from the Managed Markets News Network.
- As drug approvals dive in 2016, returns on R&D deteriorate (reuters.com)
The global pharmaceuticals industry is set to win the lowest annual number of new drug approvals this year since 2010...drugmakers' returns on research investment are deteriorating...Only 19 new drugs have been approved in the key U.S. market so far in 2016 and, with less than three weeks to go, it is clear the full-year tally will be well down on 2015 and 2014's bumper haul of 45 and 41 new products respectively...At the same time the profitability of drug research is being squeezed by steadily rising costs and increasing political pressure over the high prices of many modern medicines...As a result projected returns on investment in research and development for the top 12 pharmaceutical companies have fallen to just 3.7 percent this year from a high of 10.1 percent in 2010…