Sunday, September 25, 2016

If we can all come together, we might just have a chance...

As a followup to our blog post from a few weeks ago, it would see that we have a new issue to join the protest on. Ok so this this will likely not make the list but in a AMAZING show of solidarity. 
 Sidebar here for an interesting note on protest songs. 

Five major Healthcare Associations came together: 
Healthcare Distribution Alliance (formerly HDMA)
National Community Pharmacists Association
National Association of Specialty Pharmacy
National Association of Chain Drug Stores
Health Industry Distributors Association

And they all signed a letter that amounts to a what most would call a fairly heavy handed response to the letter OptumRx sent out regarding the requirement of VAWD Certification. In short, the industry already has the DSCSA requirements so what do we need the VAWD Certification for? 

For those not familiar, here is the original blog post and the new letter from these groups.

In Keeping with our protest theme , One might argue... If "pro" is the opposite of "con", is "progress" the opposite of "congress"?   Then do we really need congress to fix this? However It would seem congress's actions good or bad do seem to negate the need for VAWD certification.  

So what is this all about again? 

 We were recently given the opportunity to participate in an Advisory Board for a pharmaceutical industry member.  And as a result had the unique privilege to discuss with both industry veterans, current stakeholders and pharma customers,  about how this will impact the industry. and of course the larger question of whether or not OptumRx will back down from the requirement. 
Many Industry members requested and were given extension letters but most seem to have a January deadline which given VAWD's track record doesn't seem to be enough time to gain certification. 
To give you some idea of how much this really means OptumRx was about 50 Billion in revenue in 2015   and with their latest acquistions control about 25% of the US market. 

As a point of full disclosure , we wanted to get an idea of what the NABP really makes their money from. Thankfully they post operating budgets on line, and while they are not audited financials. It is interesting to note the vast majority of revenues comes from this program as well as the other accreditation's it offers. 
Image result for follow the moneyCheck out the last few years: 
2016 (note: It says 2016 but the numbers look to be from 2015) 

While it begs the question as to what the NABP budget for next year will look like,  it doesn't really change Optum's viewpoint.  But it does add fuel to the fire for those Industry groups who feel this is not justified. 

Some view points from the meeting:

  1. Most of the industry veterans and business owners felt that given this letter and with enough pressure , some heads at OptumRx will roll and they will back down.
  2. Most customers and employees/compliance folks went the other way and said there is no way OptumRx will back down. There will be some pain but the supply chain will survive and the few larger players  (or those with VAWD certification) will get the majority of the business. However after a while it will just be another cost of doing business, much like any other license. 

All agreed that nothing will change short term. And if anything is going to happen, the most sage (IMHO) advice was that nothing will change until after the election.

As things do change we will do our best to stay in front of the issues, yet another thing to hold onto your hats for, And as i said last time...

The good news is that this an excellent opportunity for those companies with systems in place. As they are way ahead of the game. Typically VAWD certification can take months if not a year , 
So you still have some time and that means that the OptumRx business will likely be up for grabs. 
So make hay while the sun shines and get moving on those opportunities. 

Are you ready to partner with a solution and team that knows healthcare and pharma?
Join us as the Specialty Pharmacy show in Washington this September. 


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