WAG, ESI bury the hatchet
When Walgreens and Express Scripts finally came to terms and agreed to again do business with each other in mid-2012, it marked the formal end of one of the costliest disputes in the history of pharmacy retailing and managed care.
Walgreens and ESI announced July 19 that they had “reached a multiyear pharmacy network agreement that includes rates and terms” that both sides could live with, although those terms were not disclosed.
The resolution of the impasse ended an ugly chapter in the history of the sometimes- strained relationship between retail pharmacies and the PBM industry. But other disputes are inevitable as pharmacy providers jostle with PBMs over contracted payment rates for prescription dispensing and pharmacy services. And it was telling that many pharmacy operators — particularly smaller independent owner/ operators and small and regional pharmacy chains without the clout or market penetration of a Walgreens — had applauded the big chain for being determined enough and powerful enough to draw a line in the sand with ESI over reimbursement terms.
The new contract became effective Sept. 15. And Walgreens began the process of trying to woo back the millions of customers that were pried away by CVS/pharmacy, Rite Aid, Walmart and other competitors after the original Walgreens/ESI service contract expired at the beginning of this year.
Presumably, that means that Walgreens isn’t losing money by serving ESI customers, as it claimed it would have been forced to do under the original terms offered by ESI. Still to be resolved, however, are other questions. Among them: How many ESI members will Walgreens be able to win back to its own pharmacy counters now that they’ve been wooed away by its competitors? Will the two sides be able to negotiate agreeable terms when contracts again come up for renewal? And, on a broader front, will the retail pharmacy and PBM industries continue to forge workable relationships that serve not only their own business interests, but also the interests of payers and patients in an era of health reform, accountable care and outcomes-driven reimbursements?
Eclipsing off-patent Lipitor, Humira tops Rx sales list
Just how much of an impact the loss of patent protection can have on a blockbuster drug became clear earlier this year.
In April, Thomson Reuters Pharma reported that Abbott Labs’ Humira (adalimumab), an advanced specialty medicine to treat arthritis, would replace Pfizer’s perennial powerhouse, the cholesterol drug Lipitor (atorvastatin) as the world’s top-selling drug in 2012. What’s more, Reuters noted in its analysis, Lipitor and the drug that briefly replaced it as the world’s biggest seller, Bristol-Myers Squibb’s and Sanofi’s blood-thinning drug Plavix (clopidogrel), might not even make the top 10 list.
It’s stark confirmation of the role price can play in the pharmaceutical market — and of the marketing power generic competitors can have when given access to a massive-selling drug that has lost its market exclusivity. Bristol-Myers reported that sales of Plavix plunged 60% in its fiscal second quarter 2012, following loss of patent protection, to $741 million.
But Humira’s rapid rise also reflects another powerful trend in pharmaceutical research and development: the growth of specialty drugs and the accelerating shift by drug makers away from traditional modes of small-molecule drug development to treat whole classes of illness, such as cardiovascular and respiratory disease. Increasingly, manufacturers are focusing their research and development on specialty and biotech research into more specialized medicines aimed at much smaller segments of the patient population, and banking on the higher premiums charged for those targeted medicines to offset the reduction in the number of blockbuster drugs taken by millions of patients.
Health reform stands as justices, voters ratify Obamacare
The Obama administration’s ambitious overhaul of the nation’s healthcare system weathered some significant challenges in 2012 and came through relatively unscathed.
The first major test came in June, when the U.S. Supreme Court refused to overturn the Patient Protection and Affordable Care Act, while still ruling that the law’s provision requiring individuals to obtain health insurance was unconstitutional.
What saved the ACA was the court’s decision that the government’s mandate to purchase health insurance qualified as a tax.
The high court’s decision to uphold the individual mandate “means that some 40 million Americans identified as uninsured will be required to purchase some level of insurance in 2014,” DSN senior editor Michael Johnsen reported June 28. “That will drive a good number of patients to medical homes and in theory, significantly increase the demand for maintenance prescriptions and other preventive or chronic healthcare services.”
The ACA leaped a second big hurdle on Election Day, Nov. 6, when voters returned President Barack Obama to office for a second term. The president’s re-election turned aside a serious challenge to the law, which Republican contender Mitt Romney had vowed to oppose, and kept health reform on track for full implementation by 2014.