The public debate about drug prices in the US has shown a light on a little-known business practice employed by certain drugmakers of using contracted or directly owned specialty pharmacies to help boost the sales of oftentimes high-priced medicines.
An October 19 article in The New York Times focusing primarily on the sales operations of Valeant Pharmaceuticals and Horizon Pharma was followed two days later by a report published online by short-seller Citron Research questioning Valeant’s accounting practices touched off yet another round of selling by investors, with those and other specialty pharma companies bearing the brunt of it.
Indeed, Valeant was the hardest hit of as the company, which was already in the crosshairs due to questions about its reliance on price hikes, has lost more than one-third of its valuation so far this week, in part because of questions about its relationship with Philidor, a specialty pharma that the drugmaker at least partially owns.
At the heart of the controversy is the questionable tactic used by Philidor Rx Services (and many others) whereby they encourage physicians to send prescriptions for high-priced medicines directly to them. The specialty pharmacy then sends the drug directly to the patient and charges them a low co-pay to avoid any disincentive for filling the prescription, then seeks payment for the expensive medicine directly from the patient’s insurance company.
The use of specialty pharmacies can thus inflate a company’s revenues, according to critics, a claim that Valeant denies, though there is no denying the fact that the intricate web of relationships between drugmakers and specialty pharmacies raises concerns about conflicts of interest as well as the theoretical ease with which they could be exploited to raise prices.
To gain better understanding about the views of doctors on their experience in dealing with specialty pharmacies as well as their opinion of the practice itself, FirstWord PLUS is polling US-based general practitioners and asking them…
1. How familiar are you with the business practice of some pharmaceutical companies of using specialty pharmacies to distribute certain – often high-priced – medicines?
2. Drugmakers' ties to specialty pharmacies has emerged as a hot-button topic this week as the controversy about the high price of medicines has led to greater scrutiny over various business practices. Some describe the relationship as “shadowy” while companies have defended it as a proprietary "competitive advantage". In your opinion, how appropriate is this practice?
3. How often are you asked by a drug company to submit prescriptions through a specialty pharmacy?
4. Drug companies suggest using a specialty pharmacy can relieve doctors of the reimbursement hassles that might otherwise discourage you from prescribing a high-priced medicine. Would you agree that this has been the case?
5. Has the controversy that erupted this week calling into question the use of specialty pharmacies by drug companies changed your opinion of the business practice?
You will be able to read the results and analysis later this week.
Results and related analysis will be published for FirstWord Pharma PLUS subscribers to read, with the opportunity for non-FirstWord Pharma PLUS subscribers to purchase these findings. To be notified when poll results and analysis become available, please click here.
As always, FirstWord would very much like to receive your feedback and suggestions.
