Albany College of Pharmacy and Health Sciences receives largest gift in its history
ALBANY, N.Y. — Albany College of Pharmacy and Health Sciences received from an anonymous donor an estate gift valued at $3 million that marks the largest bequest in the history of the college. The funds will be used to establish a scholarship fund for ACPHS students.
Upon making the gift, the donor issued the following statement:
“Though I did not attend ACPHS, I had family members who did, and they often shared fond memories of their time at the College. It feels good to know that this scholarship will help future students make similar memories, and ultimately, go on to do great things in service to their communities.”
“We are extraordinarily grateful for this gift,” stated Greg Dewey, president of Albany College of Pharmacy and Health Sciences. “As an institution, we work hard to make an ACPHS education accessible to all students, regardless of their economic backgrounds. This gift will help further these efforts by providing additional scholarship support to deserving students.”
“The generosity of our donors has been instrumental in helping generations of students fulfill their dreams of attending ACPHS,” added VP of institutional advancement Vicki DiLorenzo. “This gift continues that legacy and raises the bar in a way that is truly inspiring.”
Rx Trends 2015: Generic drug prices rise
Generic drug prices are going up. Spurred by market opportunities, short-term market exclusivity for some newly launched single-source generics and rising costs for manufacturing, quality control and raw materials, me-too drug manufacturers have escalated a series of price hikes, some of them significant.
With copycat medicines now comprising roughly 86% of all prescriptions dispensed in the United States — and “generics … now dispensed 95% of the time when a generic form is available,” according to IMS Health — the impact is significant. “We’re back to double-digit growth that we haven’t seen in 10 years … because of specialty drugs and price inflation,” said Doug Long, VP industry relations for IMS Health. “There’s a lot of generic price inflation; it’s the No. 1 issue on the minds of many payers.”
Final figures for 2014 are not yet available, but it’s clear that generic prices began a steady upward march the previous year. In 2013, the IMS Institute for Healthcare Informatics reported, “generic growth contributed 5.1% to overall growth” in “primary care therapy classes with limited innovation and few [patent] expiries.” Nearly half that growth, IMS noted, “was due to generic price increases for single-source generics, which average 13.6% price increases, compared to 9% average price increases for generics in this segment.”
In a report, Morgan Stanley research analyst Ricky Goldwasser cited several factors for generic price inflation, including a crackdown by the Food and Drug Administration on generic suppliers in India — creating a potential disruption in supplies — along with the challenges of an increasingly complex manufacturing process and the shrinking in number of generic manufacturers through mergers and consolidation.
Whatever the cause, the steeply rising price tag for some generics has drawn the attention of both mainstream media and Congress. ABC News ran a report in November on rising generic costs, asserting, “The prices of some common generic drugs have skyrocketed in recent years, but the reasons remain murky.” And lawmakers in both the U.S. Senate and House have taken up the issue.
Concerns were raised at a hearing of the Senate Subcommittee on Primary Health and Aging on Nov. 20, 2014, where Vermont Independent Sen. Bernie Sanders announced he had launched an investigation, along with U.S. Rep. Elijah Cummings (D-Md.), into the rise in prices. Citing data from the Healthcare Supply Chain Association and other sources, Sanders charged that prices on many widely used generic medicines had quadrupled in the year prior to July 2014. He and Cummings sent letters in October seeking information to 14 major generic companies.
“We are conducting an investigation into the recent staggering price increases for generic drugs used to treat everything from common medical conditions to life-threatening illnesses,” Sanders, chairman of a Senate healthcare subcommittee, and Cummings, ranking member of the House oversight committee, wrote in letters to 14 pharmaceutical companies.
The Generic Pharmaceutical Association strongly disputes Sanders’ charges, citing generics’ massive contribution to the nation’s effort to lower healthcare bills over the past decade. “The world’s leading healthcare analytics firm, IMS Institute for Healthcare Informatics, found that generics saved $239 billion in 2013 … and more than $1.46 trillion over the recent decade,” GPhA president and CEO Ralph Neas said. “That is why [GPhA] is disappointed at how some have mischaracterized the facts about generic drug prices.”
“Their data is missing one crucial element: perspective,” Neas asserted. “The examples cited by HSCA on recent purchases by group purchasing organizations focuses on 10 drugs in a marketplace of more than 12,000 safe, affordable generic medicines. In fact, thousands of generics have seen significant price erosion over time due to the competitive nature of the marketplace. One such example is that of Lipitor — for which generics have saved all involved an estimated $7 billion per year. In addition, many generic prices are so low that thousands of stores across the country offer them to consumers for $4 or even for free.”
“The most effective way to continue to keep prescription drugs affordable for patients is to increase competition,” added GPhA’s chief. “Millions of patients and the entire healthcare system would benefit from streamlining and expediting the approval process so that more generics can reach the market sooner.”
For pharmacy retailers, generic price inflation is a double-edged sword, offering higher top-line growth but potential snags both in bottom-line profitability and consumer and plan payer resistance. “If third-party payer reimbursements don’t keep pace with rising generic acquisition costs, the cost increases will squeeze pharmacies’ profits,” warned Adam Fein, president of Pembroke Consulting and CEO of Drug Channels Institute, in a recent report.
However, Fein added, “over time, pharmacies will benefit from these price increases because gross profit dollars per script will grow. If prices start declining again, pharmacies will benefit as reimbursement lags behind the lower acquisition costs. Higher generic drug prices are dampening the cash-pay, generic price war.”
“The biggest pharmacy losers are any chains that foolishly signed at-risk payer contracts, such as one with a fixed generic prescription payment to the pharmacy,” Fein asserted in his Drug Channels blog. “Such contracts are an un-hedged risk on generic deflation and superior sourcing. For these chains, generic inflation will pummel profits until contracts can be renegotiated.”
In a report on its 2014 fiscal results, Walgreens Boots Alliance acknowledged the challenge.
“Overall increases in the amounts we pay to procure generic drugs … could have a significant adverse effect on our profitability,” the company reported. “In addition, our gross profit margins would be adversely affected by continued generic inflation to the extent we are not able to offset such cost increases.”
“We expect this generic inflation to continue in fiscal 2015,” Walgreens added. “Our existing reimbursement arrangements with payers generally provide us with only limited protection against cost increases in our generic drug procurement costs. We are seeking to address this through changes in our contracting strategies and negotiations with our vendors and payers.”
The upward momentum in generic drug pricing may be temporary. Given the inevitable fact that “generic small-molecule opportunities start to dry up” by the end of the decade as patent expirations on older branded medicines taper off, “price concessions” for me-too medicines “are expected to grow” through 2018, IMS predicted, “as generics companies compete with increasing intensity.”
Healthcare trends shape industry landscape in 2015
In the January 2015 issue, Drug Store News took a look at three issues outlined in the annual PricewaterhouseCoopers’ Health Research Institute “Top Health Industry Issues of 2015,” including the delicate dance that will take place between balancing privacy and convenient access to healthcare information; the Food and Drug Administration’s increased oversight of mobile health apps; and how DIY diagnostic tools are taking shape in today’s retail environment.
In this issue, DSN looks at another three hot spot issues identified by PwC’s HRI that will help define how health care is provided in 2015. For example, the number of newly insured patients as a result of the implementation of the Affordable Care Act will have significant implications across the healthcare landscape. PwC also takes a look at how healthcare professionals like nurse practitioners and pharmacists can serve as physician extenders to address the shrinking physician pool even as the number of patients expands considerably. Finally, while the aging of the baby boomers will continue to have an impact on how health care is administered in the United States, another generation of consumers — millennials — are coming of age and are beginning to shape the delivery of healthcare in meaningful ways.
Newly insured account for nearly 10 million
A significant number of the newly insured under the Affordable Care Act have been generated out of expanded Medicaid rolls. A recent analysis by HRI found double-digit increases in Medicaid admissions among the three largest health systems in states that expanded the program. And though the Medicaid population is expected to continue to grow in 2015 as more states expand their programs, it’s the implementation of the individual mandate penalty that may help redefine who exactly the newly insured are.
Early research suggests that the remaining uninsured are likely younger and healthier than those who have already purchased coverage. “Many of these people are accessing health insurance coverage for the first time, so they really are brand new customers that the insurance industry, as well as the provider community, are trying to learn a lot about in a relatively short period of time,” said Ceci Connolly, leader of PwC’s HRI.
Indeed, it’s the demographics of these newly insured that is beginning to garner attention. “Several very reputable counts put the number of newly insured just in the past year at about 10 million people,” Connolly said. “And that by the way does not include 6 million young adults between the ages of 19 and 34 who also have gained coverage,” she said, adding that millennials are the largest of any age group that have gained coverage through the ACA.
Retail pharmacy role to expand as physician extenders
Between the expanded role played by pharmacists in providing vaccine shots and administrating comprehensive medication therapy man-agement/disease state management programs, and the rapid expansion of retail clinics that is expected throughout 2015, retail pharmacy is set to play a significant role as physician extenders.
And America is ready for it.
“Very strikingly, many consumers, about 75%, told us that they’re very interested in getting more of their care from a group known as extenders,” said Ceci Connolly, leader PwC HRI. “These are non-physician clinicians — people such as nurse practitioners, pharmacists, physician assistants — who can do quite a bit of care delivery.”
What’s more, America’s governors are calling for it. The National Governor’s Association in mid-January issued a report calling on states to better integrate pharmacy practice into the healthcare system. “As the healthcare system undergoes a major transformation in both finance and the delivery of services, states are focusing on improved quality and health outcomes,” stated NGA executive director Dan Crippen. “Integrating pharmacists, who represent the third-largest health profession, into the healthcare delivery system is one way to meet those goals.”
According to HRI, more than half of states were weighing expanding the clinical duties of nurses, physician assistants, pharmacists and other healthcare professionals by the end of 2014. In three states — New Jersey, Pennsylvania and Michigan — bills were in play to expand the role of nurse practitioners toward the end of 2014. In 2015, another dozen states are expected to introduce or reintroduce similar legislation, HRI noted.
These efforts follow in the footsteps of such states as North Dakota, which is extending pharmacist roles into telepharmacy, as well as Indiana and Vermont, which opened their first nurse practitioner-led primary care practices in 2014, according to HRI. And in late January, bipartisan legislation had been introduced in the U.S. House of Representatives, The Pharmacy and Medically Underserved Areas Enhancement Act (H.R. 592), that would formally designate pharmacists as healthcare providers under Medicare Part B.
Millennials to redefine health care
The baby boomers may very well have redefined the breadth and scope of health care, leading retail pharmacy down the road of expanded healthcare roles in an effort to accommodate a growing population of patients with chronic conditions in the face of a shrinking provider base. But it is millennials that will redefine the face of health care, in other words, how that health care is delivered.
In 2015, the U.S. Bureau of Labor Statistics predicts millennials will be the majority in the U.S. workforce, and by 2030 they will make up 75% of it, causing employers to refocus their employee benefit strategies.
According to HRI, the children of baby boomers, the nation’s 80 million millennials who were born between the early 1980s and the early 2000s will help propel a New Health Economy that advances beyond health care to support a broader market of good health and well-being. HRI has calculated that Americans already spend more than $267 billion a year on health and wellness.
That bodes extremely well for retail pharmacy, which serves as the quintessential healthcare depot with products and services addressing everything from acute care and management of chronic conditions to the aspirational goal of better health through optimal nutrition and disease prevention.
“The new entrants will continue to be disruptors around this category because they’ll think differently,” noted Karla Anderson, partner Pharmaceutical and Life Sciences, PwC. “We’re seeing it with the adoption of wearables and monitoring across all the major disease areas and we believe we’ll continue to see this in a profound way going forward.”