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Diplomat Pharmacy begins trading on NYSE

BY Michael Johnsen

 

FLINT, Mich. — Shares of Diplomat Pharmacy, the nation's largest independent specialty pharmacy according to the company, officially began trading on Friday at a price that had reached more than $17 per share in mid-afternoon trading.

“Being a public company was just a natural progression for Diplomat and the time was absolutely right,” Phil Hagerman, CEO and chairman Diplomat Pharmacy, told Drug Store News. “We see the specialty pharmacy industry at a significant inflection point. There are really important trends – small biotech is emerging as a greater and greater player. These new limited-distribution drugs are creating both significant opportunities and significant challenges in the industry,” he said. “Equally important, the tremendous cost of these specialty drugs today is creating more than ever a cry for transparency in the model of how business is done.”

And Diplomat, which over the past seven years has grown at a 65% rate, is in the perfect position to deliver on the promise of specialty pharmacy, Hagerman said. “We’re now a perfect company to step up on this void – we’re the first pureplay specialty pharmacy in the space as a public company since Accredo Health in 2005 when they were bought by Medco. There is a tremendous appetite, we think, for specialty pharmacy as a separate channel to be able to invest in.”

With the proceeds from the IPO, Diplomat plans to look at strategic acquisitions to enhance the company’s position in the marketplace. “We made two great acquisitions in the past year. [As a public company] we have the ability to go out and strategically look at acquisitions,” he said.

Diplomat also will have the ability to grow organically. “We have a tremendous balance sheet to continue to build infrastructure if we need it, even though today we’ve got significant scale at our Great Lakes headquarters building. It just really puts us in the position as we grow also to go after larger and larger clients,” Hagerman added.

The initial public offering of 13.3 million shares of common stock started at a price to the public of $13 per share under the symbol "DPLO." In mid-afternoon trading on its first day, Diplomat’s share price was already up more than 30% to $17.

Diplomat is selling 10 million shares of common stock and certain selling shareholders of Diplomat are selling 3.3 million shares of common stock. The company and selling shareholders each have granted the underwriters a 30-day option to purchase up to an additional 1 million shares of common stock (an aggregate of 2 million shares of common stock) to cover over-allotments, if any.

 

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Industry alerts patient groups to new schedule of hydrocodone combination products

BY Michael Johnsen

WASHINGTON — The Drug Enforcement Administration’s final rule moving hydrocodone combination products from Schedule III to the more-restrictive Schedule II officially went into effect on Monday. 
 
The rule change had represented an implementation challenge for retail pharmacy as the industry had only 45 days to become compliant with the final rule. Originally, NACDS had requested 180 days to allow pharmacies to become compliant with the rule. 
 
With 135 million in HCP products dispensed in 2012, according to IMS Health, that represents a significant volume of prescriptions that have to be handled differently both in terms of how the product is stored, as well as how refills are processed. 
 
“The main impact [on retail pharmacy] was getting ready. That was the biggest challenge,” Kevin Nicholson, VP public policy and regulatory affairs for the National Association of Chain Drug Stores told DSN. “We were concerned when there was only a 45-day implementation timeline. Everyone’s ready, [however],” he said. “We’re working hard to implement it and make sure patients have minimal disruption, despite the challenges patients will be facing with the new rule.”
 
In addition to updating pharmacy systems and supply chain protocols, patients may face challenges in refilling their hydrocodone prescriptions under DEA’s final rule. Prescriptions for these products that are issued on or after Oct. 6 must comply with requirements for Schedule II prescriptions and refills of these prescriptions will be prohibited. However, prescriptions issued before Oct. 6 that have authorized refills may be dispensed in accordance with DEA rules until April 8, 2015. Yet, state law, insurance limitations and some pharmacy quality and safety operations and processes may not allow for these prescriptions to be refilled. “That’s important as well because even though the DEA is saying the refills can still be used, the reality is in many or most cases, the refills will not be able to be used,” Nicholson said. 
 
 
Moving forward, NACDS has been working with patient groups and physician groups to alert them around what the HCP schedule change means for them. “The  biggest challenge [now] is continuing to educate the patients and the doctors so that they know that these medications are now in this more restrictive class — they can’t be called into the pharmacy; they can’t be refilled — and we’ve done a good job with that, too ,” Nicholson said. “We’ve been working with NCPA, the American Medical Association. We’ve been talking with the patient groups [like] the American Cancer Society, Cancer Action Network,” he said. “We want to make sure that no one is surprised by this new requirement.”
 
The National Association of Chain Drug Stores has also recently placed its support behind new legislation introduced on Sept. 18 — S. 2862, the Regulatory Transparency, Patient Access, and Effective Drug Enforcement Act of 2014 — which calls for a collaborative, coordinated approach to curbing prescription drug abuse and safeguarding patients. 
 
Introduced by Sens. Orrin Hatch, R-Utah, and Sheldon Whitehouse, D-R.I., the bill would establish a congressionally-mandated report from the Department of Health and Human Services, facilitated in consultation with the Drug Enforcement Administration and the White House Office of National Drug Control Policy, that would identify obstacles to legitimate patient access to controlled substances, issues of diversion of these products, and opportunities to better coordinate federal, state and stakeholder activities that can reduce prescription drug abuse without compromising access to medications for patients who legitimately need them.  
 
The Senate bill largely mirrors the House bill, H.R. 4709, Ensuring Patient Access and Effective Drug Enforcement Act of 2014, which was introduced earlier this year by Reps. Marsha Blackburn, R-Tenn., and Tom Marino, R-Pa.  Also backed by NACDS, that bill passed the House in August. 
 
 
 
 
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FDA approves Gilead’s hepatitis C remedy Harvoni (ledipasvir and sofosbuvir)

BY Michael Johnsen

SILVER SPRING, Md. – The Food and Drug Administration on Friday approved Gilead's Harvoni (ledipasvir and sofosbuvir) to treat chronic hepatitis C virus genotype 1 infection.
 
Harvoni is the first combination pill approved to treat chronic HCV genotype 1 infection, the agency stated. It is also the first approved regimen that does not require administration with interferon or ribavirin, two FDA-approved drugs also used to treat HCV infection.
 
Both drugs in Harvoni interfere with the enzymes needed by HCV to multiply. Sofosbuvir is a previously approved HCV drug marketed under the brand name Sovaldi. Harvoni also contains a new drug called ledipasvir.
 
“With the development and approval of new treatments for hepatitis C virus, we are changing the treatment paradigm for Americans living with the disease,” said Edward Cox, director of the Office of Antimicrobial Products in the FDA’s Center for Drug Evaluation and Research. “Until last year, the only available treatments for hepatitis C virus required administration with interferon and ribavirin. Now, patients and healthcare professionals have multiple treatment options, including a combination pill to help simplify treatment regimens.”
 
Harvoni is the third drug approved by the FDA in the past year to treat chronic HCV infection. The FDA approved Olysio (simeprevir) in November 2013 and Sovaldi in December 2013.
 
 
Hepatitis C is a viral disease that causes inflammation of the liver that can lead to diminished liver function or liver failure. Most people infected with HCV have no symptoms of the disease until liver damage becomes apparent, which may take decades.
 
Some people with chronic HCV infection develop scarring and poor liver function (cirrhosis) over many years, which can lead to complications such as bleeding, jaundice (yellowish eyes or skin), fluid accumulation in the abdomen, infections and liver cancer. According to the Centers for Disease Control and Prevention, about 3.2 million Americans are infected with HCV, and without proper treatment, 15% to 30% of these people will go on to develop cirrhosis.
 
Harvoni is the seventh new drug with breakthrough therapy designation to receive FDA approval. The FDA can designate a drug as a breakthrough therapy at the request of the sponsor, if preliminary clinical evidence indicates the drug may demonstrate a substantial improvement over available therapies for patients with serious or life-threatening diseases. Harvoni was reviewed under the FDA’s priority review program, which provides for an expedited review of drugs that treat serious conditions and, if approved, would provide significant improvement in safety or effectiveness.
 
Harvoni and Sovaldi are marketed by Gilead based in Foster City, Calif. Olysio is marketed by Janssen Pharmaceutical based in Raritan, N.J.
 
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