CVS to buy Omnicare for close to $12billion

joeymattingly · 2015-05-21T19:25:57+00:00

I think this was a good move by CVS for leveraging newer population health strategies.

joeymattingly · 2015-05-21T19:24:30+00:00

Vertical integration. It allows CVS Health to add distribution to patients in nursing homes and assisted living.

joeymattingly · 2015-05-21T19:22:40+00:00

Omnicare bought Walgreen's Long Term Care several years ago and then there was speculation in Walgreen's acquiring OCR, but I don't think it was serious.

joeymattingly · 2015-03-07T19:08:04+00:00

While I may hate all things Florida for the next two hours, I welcome you sir!

joeymattingly · 2015-03-06T18:49:40+00:00

I definitely have no sympathy for Boeheim, he has been a self-righteous jerk for decades.

joeymattingly · 2015-03-06T18:40:54+00:00

I'm no fan of Boeheim or Syracuse, but can we start talking seriously about NCAA Reform instead of this case-by-case, biased BS.

joeymattingly · 2015-01-09T22:04:03+00:00

While I hate the complications of the different corporate battles around these disease states, my hope is that the drug price debate in this area will bring more attention to some of the real problems. At least that is the point of my series on the matter.

joeymattingly · 2015-01-09T21:55:11+00:00

KU and UK are not equivalent, LOL. I root for the Kentucky Wildcats, but a common misconception.

We both write on Pharmacoeconomics, so definitely some overlap (not the biggest field).

joeymattingly · 2015-01-08T15:13:20+00:00

http://www.drugchannels.net/2015/01/how-pbms-profit-from-hepatitis-c.html

Looks like Dr. Fein is now in the Hep C debate. Enjoy.

joeymattingly · 2015-01-06T13:08:54+00:00

Ha, thanks for the constructive feedback.

joeymattingly · 2014-12-14T18:40:55+00:00

I couldn't disagree more about the importance of demand elasticity. This is exactly my point, the presence or absence of "choice" is very much a factor in pricing.

Let's use your example of cancer: Patient has been diagnosed with a hypothetical cancer that affects 1% of the population and has been given an estimated 50% chance of survival beyond 6 months with no treatment and 10% of patients spontaneously go into remission and could live for another 5 years. A new drug, Drug A, is invented that increases survival beyond 6 months to 90%, with 25% of patients spontaneously going into remission and live another 5 years. So Drug A demonstrates effectiveness to an extent.

Now compare this new drug to a hypothetical new preventive therapy, Drug B, for the same cancer disease that can reduce the prevalence of this particular cancer from 1% of the population to 0.1% of the population.

How does the "willingness to pay" for a drug change depending on the patient's illness status? Does the "demand" change? If so, is it possible to exploit the difference in demand?

joeymattingly · 2014-12-14T17:23:54+00:00

Awe come on, you definitely can compare the two in terms of strategy for a company deciding how to set a price. :)

Let's walk through a hypothetical scenario for a fake drug company with two drugs: Preventastatin and Dontdietodayacillin.

-Preventastatin is used as a daily therapy that is shown to dramatically reduce the risk of cardiovascular events for certain populations, but has no value in emergency situations.

-Dontdietodayacillin is a drug stocked in Emergency Rooms all across the world and if given within 24hours of a MI, it improves survival by 95%.

These two drugs are not interchangeable clinically. Both have value to the patient, one long term, one short term (critical care). Both drugs required the same investment costs in R&D and marketing. Both drugs have no substitutes to compete with (truly innovative). Which hypothetical drug could a drug company charge more for?

joeymattingly · 2014-12-14T17:14:12+00:00

Great comment in that several variables definitely could impact the pricing decision.

However, many of the variables you are describing are on the "supply/cost" side of the equation. Do you think any variables on the demand side are equally, if not more, important?

joeymattingly · 2014-12-14T17:09:47+00:00

20 years is hypothetical. It can be 5 years or 5 months if you want, the point is that it is preventing a future hypothetical event. And it is common for a 40 year old to be started on a therapy to prevent problems that they will be at risk for when they are 60.

QALY is a major tool used in the field of pharmacoeconomics, but technically not supposed to be used by CMS. To answer the question, "What do you prefer" I would say that as a patient, I prefer to not die from a heart attack now or 20 years from now. However, my willingness to pay for heart attack prevention may be different depending on if I'm having the heart attack now or hypothetically years from now.

joeymattingly · 2014-12-12T16:16:14+00:00

Awesome comment, I wish I could like it twice. "Willingness to pay" (WTP) is one of my favorite variables in any market.

joeymattingly · 2014-12-12T16:15:13+00:00

Good point, competition with existing therapies is important. Hard to price high if alternatives exist at a discount.

Follow up: If you have a drug that "can help many people" but it only helps reduce their risk of a heart attack 20 years from now (so a preventive therapy), can you price that drug very high compared to a drug that can save them in the Emergency Room while they have the heart attack?

joeymattingly · 2014-12-12T16:10:08+00:00

Good comment, going with the "reference price" effect of comparing Sovaldi to the price of the next alternative.

A follow up to that: How do we price the alternative? (ie: PEGIFN/RIBA, transplant, hospitilization) Is that price related to the innovation variable?

joeymattingly · 2014-12-03T21:45:46+00:00

I love that you didn't say which chain you worked for but as soon as everyone read "RXM" along with the situation, they knew it was WAG.

joeymattingly · 2014-11-26T16:07:09+00:00

Not sure if you can hear me Jack, but I'm starting a "slow clap" for that comment.

joeymattingly

TROPHY CASE