Shift away from PBM could make room for more broad-service, integrated approach to health care
WHAT IT MEANS AND WHY IT’S IMPORTANT “We don’t have to be the PBM.” That’s what Greg Wasson, Walgreens president and CEO, told Drug Store News in one interview last year, and it neatly encapsulates the dynamic that may be unfolding behind the scenes at the nation’s top pharmacy retailer.
(THE NEWS: Walgreens said to consider sale of PBM. For the full story, click here)
Walgreens reportedly is shopping out its pharmacy benefit management subsidiary, Walgreens Health Initiatives. Thus far, the company is mum about the possible sale of WHI, but divesting its PBM would make some strategic sense for a company whose mission has crystallized over the past two years around a new set of priorities: to become the nation’s go-to resource for retail and workplace health and pharmacy services.
Quite deliberately, Walgreens has pursued a different business model than that of its top drug store rival, CVS Caremark. Instead of building a combined pharmacy/PBM powerhouse to move market share and prescription business to its own stores, Walgreens has spent billions and devoted enormous human capital to remake itself as a fully integrated, full-service retail health-and-wellness solutions provider. Its message to employers and other health plan sponsors — and to other PBMs and managed care organizations, for that matter — is designed to appeal to their bottom lines as they grapple with ever-rising health costs for employees and plan members.
Walgreens’ message to the healthcare marketplace, boiled down to its essence, has a powerful appeal to cash-strapped benefits providers. It says, “We’re capable of delivering not only pharmacy and medication therapy management services to employers and other health plan sponsors in dire need of solutions, but also a wide range of other health services like on-site employer clinics, retail-based clinics, specialty pharmacy services, home infusion and home health care.” That’s why Walgreens markets itself not only as a chain of more than 7,560 drug store pharmacies, but also as a patient-focused national network of more than 8,000 accessible “points of care.”
With that kind of broad-service, integrated approach to health care, it would be no great surprise to see Walgreens’ focus shift away from operating a standard PBM model.
Cigna, Merck Helps band together to stop diabetes
BLOOMFIELD, Conn. An insurance company and a patient assistance program have joined forces to improve medication adherence outcomes of Type 2 diabetes patients.
Cigna and drug maker Merck’s Merck Helps program inked a two-part contract that provided discounts if Cigna customers with diabetes lowered their blood sugar levels, regardless of the medication they were taking, and also provided for additional discounts if people who were prescribed Merck’s drugs Januvia and Janumet took their medications according to their physicians’ instructions. Discounts will be shared in various ways with Cigna employer clients.
Medication adherence was 87% for people taking Januvia (sitagliptin) and Janumet (sitagliptin/metformin), Merck’s oral anti-diabetes medications. The medications are used in conjunction with diet and exercise to improve blood sugar control in adults with Type 2 diabetes, a condition that has reached epidemic proportions in the United States, the companies said.
"Merck is pleased to partner with Cigna on this program," said Sethu Reddy, VP medical affairs at Merck. "As the number of people with diabetes continues to increase in the United States and globally, achieving blood sugar control and increasing adherence to diabetes treatment regimens are important goals for patients with Type 2 diabetes and their doctors."
Added Jeffrey Kang, Cigna’s chief medical officer, "Because Cigna is able to coordinate data and resources within our company, we are better able to support the health needs of the whole person. By integrating medical and pharmacy programs, we can identify people who may need extra support early in the diagnosis and progression of their diabetes, which means customers can potentially stay healthier longer."
Study: Pharmaceutical supply chain could experience more vulnerability
NEW YORK Risks of counterfeiting, contamination and intellectual property theft could increase with the globalization of the pharmaceutical supply chain, according to a new report.
Axendia, an analysis firm focused on life sciences and health care, published a study co-sponsored by PricewaterhouseCoopers in which 50% of surveyed pharmaceutical and life sciences executives said they saw imported raw materials as the greatest vulnerability in the supply chain, with 61% saying contaminated and substandard materials would be the top threat in the next five years. As recently as a decade ago, executives considered counterfeiting and diversion small-scale threats, but a growing number consider them major concerns.
According to the report, such emerging economies as China, India, Mexico and Brazil increasingly are becoming attractive markets for drug companies, but the drive to lower costs also means more raw materials are being sourced and more drugs are being manufactured in them, even though outsourcing drug development to companies in other countries carries operational risks.
“With manufacturing, sourcing and the sale of medical products expected to increase dramatically in the emerging markets, the geographical expansion of the supply chain will make it more difficult to manage, as well the industry’s changing product mix,” PwC pharmaceutical and life sciences advisory services partner Wynn Bailey said. “In order to meet the demands of globalization, the pharmaceutical supply chain will need to become much more flexible, with different manufacturing routes and distribution channels for the different kinds of products.”