2/10/2017

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Changes in Pharmaceutical and Healthcare Environment

William Roth, Blue Fin Group

William Roth is the Founding Partner of Blue Fin Group. The conflict of interest was resolved by peer review of the slide content.

Disclosure

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• Review key legislative issues facing community pharmacy.

• Discuss global issues that are affecting community pharmacy long-term.

• Evaluate the reimbursement picture changes that are developing for pharmacy.

• Discuss the movement toward enhanced services for pharmacy and how this is growing and developing.

Learning Objectives

• Pharmaceutical Ecosystem• Overview of the system and macro-situations

• Sourcing The New Mix and channel dynamics• Scramble to sustain profit margin – musical chairs

• Reimbursement and payer dynamics• Pharmacy and Medical Benefit converging

• Pharmacy Business Model Evolution

Discussion Topics

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Key Message Strategic Implication

CMS has a “linked” view of the HC Ecosystem

HC spend $3.2 (growing at 7%) assumed holistic view of the flow of the discounts down to the provider and pharmacy (squeeze out inefficiency)

Reimbursement primary agent of change

Government and Employers dealing with exponentials. Pressuring the economics drives horizontal and vertical consolidation.

Product mix already is driving change

Decline of small molecule, the rise and fall of generics, the explosion of specialty, and the slow adoption of biosimilars – long term stakeholders struggled to evolve

New HC service models and their effort for HC effectiveness

As accountability for science and how it’s delivered intensifies, manufacturers take a much more active role in ensuring optimal provider and patient journeys

New models will emerge for sites of care

It’s a great big game of musical chairs.  IHNs create pharmacies. Providers create ITPs.  GPOs go to payers and become distributors. Specialty channels emerge.  Integration occurs.  Channels become providers.

Status quo is being rethought From patient and provider engagement, to channel relationships, to benefit constructs, and account management – there are no sacred cows ‐ all is on the table

Industry Macros At A Glance

Industry Trends and Impacts 2016-2020

Product Mix & InnovationThe shift in mix and the associated economics will drive immediate and profound change. Beyond brand, generic, biotech lies genetic testing, precision, synthetics, regenerative, etc.  Future of new science depends upon the commercial model.

Payers, Delivery Systems, Providers, & Channels Are  

Integrating Into Something NewLines are more blurred then ever before. 

Aligning science and service to create value.

Democratization, Technology, Data and 

Human LongevityPlan Sponsor mandates coupled with 

Payer visibility (EMR, etc), Genetics and behavioral data increase the ability to influence the Provider and the Patient 

Both can be monitored and managed, to see the decline of paternalism and the 

rise of the empowered patient

Plan Sponsor Pain, Payer Mix, Convergence of Med and Pharm Benefit,  Reimbursement ChangeGovernments and Plan Sponsors objective is cost control.  A tipping point is here/fast approaching. Fragmented application of science.

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7

8

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Products – Understanding Differences In Commercial Models

Brand Generic Specialty Biosimilar Orphan Precision

Cost

Patient Base

Payer Barriers

Complexities

Low

Very large

Low

Rare

Very Low

Very large

Very Low

Very rare

High

Small to Medium

High

PA, Step Edit, Benefit Design, Reimbursement, Storage, Admin

High

Small to Medium

High

PA, Step Edit, Benefit Design, Reimbursement, Storage, Admin

Very High

Very Small

Very High

Find patient, PA, Step Edit, Benefit Design, Reimbursement, Storage, Admin

Very High

Very Small

Uber High

Qualify patient, PA, Step Edit, Benefit Design, Reimbursement, Storage, Admin

Change In Product Mix Drives Significant Change

* Intervening years’ share removed for clarity.  Source:  Simplified BFG estimates based upon IMS data and BFG Research

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Letting It All Spill Out – 2017 will Not A Good Year For Intermediaries

In the News• Price increases reduced, lack of generic price increases, massive layoffs, hits to stock, generic 

company changes, price increases to pharmacies, weak margins.

Happening Or About to Happen• Fragmentation of the prime vendor model• Buy‐and‐bill Med Benefit products have been going “around” full line wholesale for 13 years now –since 2003 – passage of MMA

• Specialty Products deliver very little margin as a % ‐ constrained by FMV

• 70% of wholesalers’ profits from Generics• Generic Wave Machine stops in 2017 • Biosimilars are not the channels’ savior as originally hoped – lower priced brands (less money)• Reimbursement pressure will continue because Plan Sponsors are hemorrhaging• Threat of removal of 11‐20 million covered lives on top of all of this – ACA repeal

BRX Economics On Wholesale Distribution

> $5 billion

2.5%

3.0%

3.5%

4.0%

5.0%

10.0%

> $1 billion > $500 million

Inclusive of prompt pay discountGraph does not introduce complexities of variable cost of goods across provider type and size

Weighted gross margin across branded Rx manufacturers

Variable gross margin contribution (DSA) from branded Rx manufacturers

Sell price below cost less prompt pay discount as weighted market‐basket approach to cost of goods to providers

Wholesaler Operating Costs

Wholesaler Net Profitability

Margin from M

anufacturers

Size of Manufacturer

Lost leaders being repriced

Growing Impact of Specialty

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Evolution Of New Wholesaler Pricing Model

1990s‐2000s Early 2010s Late 2010s

Slow Erosion Of Prime Vendor Model

Brands (C‐5%)

Generics (Net ~ 20%)

Specialty (C‐5%)

Net Effect (C‐5%)

Brands (C‐5%)

Generics (Net ~ 20%)

Specialty* (C~5%) 

Net Effect (C‐4.85%)

Brands (C‐5%)

Generics (Net ~ 20%)

Specialty (C‐2%)

Net Effect (C‐3.24%)

85%

10%

5%

100%

65%

10%

25%

100%

35%

15%

50%

100%

*Began carving out RA, Hep C, and others

Economics Of Wholesale Distribution –Fragmenting Bundle

2.5%

3.0%

3.5%

4.0%

10.0%

15.0%

20.0%

Margin from M

anufacturers

30.0%

Specialty Brand Pharmaceuticals Primary Care Brand Pharmaceuticals Generic Pharmaceuticals

$$$ $$$ $$$

Size of Manufacturer In Gross Revenue

5.0%

6.0%

WAC/CC

Synthetic Brands have been the core of pharmaceutical distribution – this piece of the business is declining to 23% of dollars by 2020

Specialty products used to be automatically included in the wholesalers aggressive cost less pricing model.  Now they are either being net priced or carved into a separate pricing tier different from the primary care brands.

$ $ $

This is because specialty products are typically sold from manufacturers using conservative approaches to discounting and fee structures.

Profitability on generics fuels much of the distributors margin.  When a pharmacy agrees to buy generics from the distributor, the distributor decreases the COGs on brands by another 2‐3% on average. 

Due to the end of the patent cliff, the model in generics is about to come crashing down.

Specialty products are much less profitable for the distributor % vs $.  Due to M&A activity and 

the increased presence of specialty products, manufacturers suppress available monies to distribution.

Movement to unit based pricing remains a progression

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Distributor Impact From Generic Wave

$100 $100$108

$55

$26

$12

$0

$20

$40

$60

$80

$100

$120

0‐6M (1 Gx) 6‐12M (2 Gx) 12M+ (3+ GX)

Reven

ue

Wholesale Revenue Impact

WS Revenue Pre‐Cliff WS Revenue Post‐Cliff

$1.50 $1.50 $1.62

$5.35

$1.50

$0.34

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

0‐6M (1 Gx) 6‐12M (2 Gx) 12M+ (3+ GX)

Margin

Wholesale Margin Impact

WS Margin Pre‐Cliff WS Margin Post‐Cliff

Source: BFG analysis from industry insider interviews.  Based on $100 Branded drug with annual 8% price increase.  Assumes introduction of exclusive generic for first 180 days, 2nd generic at 6months and 3rd at 12 months with generic at 55%, 26%, 12% of Branded WAC, at 0‐6, 6‐12, 12+ months respectively.  Assumes wholesaler margin on Generics at 10‐30% and brand margin assumed at 1.5%

Retailers Impact From Generic Wave

If No Generic Wave Occured Generic Wave

$35 M

$39 M

$44 M

$50 M

$56 M

$63 M

$18 M $19 M $20 M $22 M$23 M

$25 M

$ M

$10 M

$20 M

$30 M

$40 M

$50 M

$60 M

$ M

$100 M

$200 M

$300 M

$400 M

$500 M

$600 M

2011 Proj2012

Proj2013

Proj2014

Proj2015

Proj2016

Margin

Revenue

Pre‐Cliff Brand Rev Pre‐Cliff Generic Rev

Pre‐Cliff Brand Margin Pre‐Cliff Generic Margin

$35 M

$30 M$32 M

$35 M$37 M

$39 M

$18 M

$29 M$27 M

$30 M

$35 M$33 M

$ M

$10 M

$20 M

$30 M

$40 M

$50 M

$60 M

$ M

$100 M

$200 M

$300 M

$400 M

$500 M

$600 M

2011 Proj2012

Proj2013

Proj2014

Proj2015

Proj2016

Margin

Revenue

Post‐Cliff Brand Rev Post‐Cliff Generic Rev

Post‐Cliff Brand Margin Post‐Cliff Generic Margin

Source: BFG analysis from 2012 $250M Pharmacy Margin Analysis Project

$58M $59M

$88M $72M

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The Ocean Becomes A Quiet Lake (What’s Left Are BLAS)

$12.0 B

$8.0 B

$28.7 B

$6.4 B

$15.9 B$18.3 B

$9.5 B

$2.3 B

$5.4 B$3.9 B $4.0 B

$.0 B

$10.0 B

$20.0 B

$30.0 B

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Patent Cliff 2010‐2020

Source: 2012 Medco Patent Cliff Report and USPTO .  2012‐2020 Impact by Manufacturer shows only manufacturers with >$1B impact

0%

20%

40%

60%

80%

100%

$.0 B

$3.0 B

$6.0 B

$9.0 B

$12.0 B

$15.0 B2012‐2020 Patent Cliff Impact ($B and % of 2011 Revenue) by Manufacturer 

Generics are a losing industry come 2017

Intermediaries Are Scrambling To Weather The Hits

Diversifying businesses, creating alliances, reducing 

costs, raising prices to downstream buyers, focusing on Specialty

Consolidating, diversifying, data 

business, services to downstream 

members, vertically integrating 

Diversifying businesses, creating alliances, pursuing networks, reducing costs, focusing on Specialty, IHN integration

Diversifying businesses, 

consolidating, creating alliances, reducing costs, 

focusing on Specialty, MCO integration

Consider how this would affect your business – do not think in the past

Which Models Are Impacted By These Changes And What Are They Doing?

Wholesale Distributors

IHN GPOs Retailers PBMs

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Evolving Pharmacy Model

No support for BI/BV, copay, no re‐education and no adherence 

support+ 50% abandonment issue‐ 25% adherence issue

If economical for SPP, basic support for BI/BV, copay, minimal re‐education and some adherence 

support+ 40% abandonment issue‐ 20% adherence issue

If made aware of PS, support for BI/BV, copay, re‐education and no 

adherence support+ 10% abandonment issue‐ 10% adherence issue

IF ambulatory services, support for BI/BV, copay, no re‐education and 

no adherence support+ 5% abandonment issue

0% adherence issue

IDN

Patient presents in a Specialty Area

HCP prescribes a self‐administrated product –

leaves with an Rx

Problem for the IDN• Lost revenue $$$

Value to external pharmacy

• Risk for IDN – if patient cannot gain access or be compliant –readmitted –lowering reimbursement rates

Problem for Others• Providers – losing all value and 

increasing the risk• Patients – do not realize the care 

they expect from IDN• Manufacturers – loss of revenue 

and drug viewed as either troublesome to Rx or doesn’t work

• Payers – really Plan Sponsors –higher overall cost of care

1 2

7

4

3

8 5

6

Retail Pharmacy

Specialty Pharmacy

Mfgr Patient Services

IDN/AmbulatorySpecialty Pharmacy

Optimize The Patient JourneyInclusion is about solving this puzzle

Rx but no fill Start Therapy Compliance Persistency

Abandonment AdherenceTime to Fill

NDC blocks, tiers, growth of closed lives plans, OOP increases, growth of Medicare

Focus on getting the Rx to pharmacy: E-Prescribing at 35% in 2015**

PAs, SEs, testing, benefit mgmt Taking as directed

Counseling and training

Downdosing

100%>>

Holistic view of the patient Rich education and support Monitoring

According to AMCP*, the rates of abandonment and adherence result in 15‐45% loss of revenue

Engagement 1st 3 months Define Regimen Outcomes

5‐40%* X% 20% 20%

Was never sufficiently addressed by industry because of competing priorities and degree of effort required to change

Side-effect mgmt

Education - outcome

* AMCP JMCP 2015 adherence reports** Surescript article August 2016 

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If Not, Manufacturers And MDs Will Solve It

Attract Patients (Identify) Easy access to passionate people and high quality information on disease, therapy, payer coverage and service model

Acquire Patients (Access) Overall service model that supports provider confidence in ability to initiate therapy and get reimbursed

Convert Patients (Start) Services that support provider reimbursement, patient payment, training and first dose coordination

Support Adherence (Regimen) Services that support, engage and empower patient and caregivers

Retain Patient (Brand Loyalty) Communication about alternate therapies in manufacturer disease state portfolio, initiated by signal of risk to switch or discontinue

Patient Services – Optimizing the Patient Journey

Symptoms, Diagnosis, Select 

Therapy

Ensure Coverage, Select Site of Care

Address Unique Patient Needs

Initiate First DoseComplete Therapy 

Regimen

• 24 hour hotline• Info for patients and caregivers (disease, therapy options, payer coverage) Disease info

• Info for providers (clinical info, payer coverage info)

• Referral processing

• BI / BV• Provider education

• Patient education

• Copay support• PAP• Foundation support

• Denial appeals• Transportation services

• REMS requirements

• Coordination / scheduling support

• Provider billing assistance

• Provider training• Patient training• Reimbursement hotline

• Case management• Risk‐driven reminders

• Adverse event handling

• 24 hour hotline• Behavioral coaching

• Peer‐to‐Peer Mentoring

• Virtual communities

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Specialty Pharmacy has Taught What is Possible

ReimbursementClinical Data AnalyticsHotline Support

• Call Center Scripting

• Call Center Management

• Call Triage

• Billing and Coding 

• Sales Rep Support

• Market Preparation Support

• Benefit Verification

• Prior Authorization

• Pre‐certification

• Medical Appeals

• Financial Appeals

• Co‐Pay Assistance

• Alternative Funding

• Medicare Part D

• Patient Assistance Program Management

• Clinical Trial Conversion 

• Compliance / Adherence Support

• Nurse Training & Coordination of Patient Training

• Linkages to Outcomes, ACOs, PCMHs

• Role of Pharmacy integrated with collaborative care

• Recommending alternative therapies for holistic pharmacoeconomicreasons

• Weekly, Monthly, and Quarterly Reporting

• Hotline Metrics

• Service Metrics

• Reimbursement Metrics

• Compliance Metrics

• Reimbursement Service Metrics

• Web Based Sales Tracker Utility

• Physician Web Portal

• Data Aggregation Services

Pharmacy

• Patient Referrals

• Pick, pack and shipment of drug to patient / site of care

• Collection of patient co‐pay

• Submit claims to payers

• Receive reimbursement from payers

• Switching of patients to alternative therapies for economic reasons

• Inventory Management

Current View of Retail Pharmacy

Direction of Retail Pharmacy

IDN/HMO To Become The New Model(Delivery of Care At the Right Cost)

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Why? IDNs Gaining Influence And Control

Control of Prescriber(i.e. Strict formulary with mandated internal eRX)

Influence on Prescriber(i.e. reward, penalty or relationship with a prescriber)

Kaiser

Distributor

AcuteNon‐Fed

VA

Control of PatientInfluence on Patient

PBM

Clinic

SPPLTC

GPORetail/Mail

Control = $ leverage

Kaiser Model = best commercial leverage

New Technologies enable the IDN

IDN

Plan Sponsors support this migration

1

2

3

4

Every IDN Is Different – Choose Carefully

IDN w/ limited ambulatory

Capital constrainedStruggling with priorities

Capital pressuredResource constrainedStruggling with priorities

Capital limitedResource limitedSystems multi‐focusedStruggling with priorities

Capital for strategic useResources to allocateRetail pharmacy skillPayer access improvedStruggling with priorities

Capital empoweredResources to allocateRetail pharmacy skillPayer access enhancedStruggling with priorities

Relies on other SPs Supports some SpecialtyRelies on other SPs

Building functionsBuilding technologyBuilding dataFocused TA build‐outOperationally focusedRelies on other SPs

Enhancing functionsEnhancing technologyEnhancing dataFocused TA build‐outPerformance focused

Innovating functionsInnovating technologyInnovating dataFull TA build‐outIntegrated Care

IDN w/ small ambulatory

No systems/data

IDN w/ ambulatoryBasic systems/data

IDN w/SPIntermediate systems/data

IDN w/ large SPAdvanced systems/data

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IDN Pharmacy Will Take Time To Mature: Stages of Excellence

101Rx Journey(Adjudication)

201Enhanced Rx Journey

(Case Management)

301Care Journey

(Medical Intelligence)

401Outcomes Journey

(Patient Reported Outcomes)

Varies by TAPrescriber dataPatient (de‐identified)Patient attempts therapyInsurance benefits (time)Prior AuthorizationStep EditsTier statusPrescription overviewPrescribed supply Dispensed as WrittenElectronically subscribedPatient Out of PocketAssistance amountAssistance programStatus (time to fill)AbandonmentShipping details

Facility typeBasic Patient DataSmoker, pregnant, weight, heightICD9 code (I,II,III)Prior diagnosis (I,II,III)Prior treatmentCombo‐therapySource of patientInvention date/methodTest conductedLast surgery dateLine of therapyEducational interventionAdherence/abandonmentRx HistoryPatient histology

SocioeconomicsWeight trendBlood pressure trend Liver enzyme trendCholesterol trendCurrent/previous diseaseCT Scan resultsGenetic predispositionsCare historySpirometry testSputum testBiopsy resultsBehavioral data Dates of behavior changeDrug interaction risksDrug/treatment response

Physical well‐beingSocial/family well‐beingRelationship with doctorEmotional well‐beingFunctional well‐beingTreatment responseDuration of responseProgression free survivalDisease free survivalMass sizeBehavioral changes

Open Preferred Limited Exclusive

• > 100k patients

• Low control

• Low touch service

• No data visibility

• No limit on access

• 100k – 20k patients

• ⇧ control

• Low touch service

• ⇧ data visibility

• No limit on access; list of preferred partners

• 20k – 5k patients

• ⇧ control

• Medium touch service

• ⇧ data visibility

• 1 SPP/$1,000 drug cost

• 1 SPP/100 patients/month

• < 5k patients

• High control

• High touch service

• High data visibility

• 1 SPP

How Network Partners Are Chosen

Level of ControlChannel Access To Drug

These networks can vary by drug AND by type of site of care

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View Of Manufacturer Networks

Open LimitedPreferred Exclusive

•Serves large patient populations (>500k+)

•$ and care poorest•Little effort and cost for the manufacturer

•Product available for all sites of care

•Market dynamics dictate care

•No visibility to patient journey – high rates of abandonment – poor adherence

•Less connection with sites of care

•Discount impacts•Patient services is an afterthought

•More effort and cost for the manufacturer

•Must direct provider and patient

•Payer mandates•MCO/PBM SPs•IDNs/Clinics typically omitted

•80/20 visibility to patient journey –modest improvements on abandonment and adherence

•Still no payer data•Discount impacts•Patient services is a back‐up plan

•Significantly more effort and cost for the manufacturer

•Must direct provider and patient

•Payer network coordination

•MCO/PBM SPs•IDNs/Clinics typically omitted

Benefits

Challenges

•Serves large patient populations (<100k)$ and care enhanced 

•Manufacturer Patient Journey requirements now influence care

•(REMS)

•Serves large patient populations (<500k)

•$ and care enhanced•Contracts pharmacy for data/services

•Product available for all sites of care

•80/20 rule serviced

•Serves large patient populations (<10k)

•$ and care optimized•Manufacturer Patient Journey requirements now influence care

•Every patient intervention point managed – no leaks

IDNs have access to products in several classesStrategy is to get the limited and exclusive products to chase the IDN Network

Product type and Reimbursement

Primary Care Pharmacy Benefit

Specialty Pharmacy Benefit

SpecialtyMedical Benefit

Ultimate Economic buyerFocus on high spend and low 

patient counts

Plan Sponsor23% of spend*

Plan Sponsor35% of spend*

Plan Sponsor35% of spend*

Economic GatekeeperReal motives are roughly 5% 

profit on total volume

PBMBlocks and tiers/copayPush product to cash

PBMPAs and Step Edits

Patient hits deductible fast

MCOPAs and Step Edits

Patient hits deductible fast

Economic AdministratorReal motives are roughly profit on total volume

PharmacyAWP – 18%

Low cost to serve

PharmacyAWP ‐ 20%

Low $ to high cost to serve

ProviderASP + 4.3%

Office visit and admin $

Economic ConsumerIncreasing ownership for 

economics – poor knowledge of access and C&P

Patient(low OOP, no deductible impact, potential for 

blocks)

Patient(high OOP, hit deductible fast, need for support)

Patient(low OOP, hit deductible fast, 

physician supports)

Non‐economic buyer ProviderAccess support is cost

ProviderAccess support is cost

n/aROI for access support

Business Model Large # patient, low dollar, low abandonment, high adherence, directional 3rd

party data

Small # patient, high dollar, high abandonment, low

adherence, actionable direct data

Small # patient, high dollar, high abandonment, low

adherence, mix of actionabledirect data

Understanding Flow Of The Dollar By Product Type And Benefit Type

*Percentage Mix by 2020

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Growing Concern of Pharmacy Profitability

Service Fees/Rebates from manufacturers vary based on multitude of factors. Evaluation as bona fide service and FMV to be determined

SPPs seek 5-6% gross profit to offset 2-3% operating expenses

Reimbursement (BI/BV) cost assumes 30 mins/Rx @$60/hr; and 30 mins for PA on 50% of Rxs

Patient services cost assumes 15 mins/Rx at $40/hr

Pick/pack/ship cost /Rx assumes $15 per shipment

SPP’s profitability drivers: product acquisition cost; revenue from manufacturer contracts (service fee/discount/rebate); reimbursement from payers; and SPP operating costs.

AWP -15% AWP-17% AWP-20%

Wholesale Acquisition Cost $5,950 $5,950 $5,950 Average Wholesale Price (AWP = WAC + 20%)

$7,140 $7,140 $7,140

Reimbursement from Payer (AWP-x%)

$6,069 $5,926 $5,783

Purchase Price from Manufacturer or Wholesaler (WAC-5%)

($5,653) ($5,653) ($5,653)

Reimbursement - Purchase $417 $274 $130 Manufacturer Service Fees (2% of WAC)

$119 $119 $119

Gross Margin $536 $393 $249 Gross (% of WAC) 9.0% 6.6% 4.2%

Reimbursement BI/BV Cost/Rx ($42) ($42) ($42)Patient Services Cost/Rx ($10) ($10) ($10)Pick/pack/ship Costs/Rx ($25) ($25) ($25)Net Profit $/Rx $459 $316 $172% of WAC 8.1% 5.5% 3%

Sourcing Will Need to Be Reconsidered

Buyer aggregation

Exclusive or openExclusive or open

FL WD SDSPP as SD PD Niche GPO

Exchange

3PL Services

Prime Vendor

Arbitrage

Vendor

Arbitrage/Services

Vendor

Arbitrage/Services

Vendor

Arbitrage/Services

Vendor

Arbitrage

Vendor

Services

Vendor

Services

Vendor

Services

Vendor

Services

Buyer Agent

Buyer and Seller Agent

Buyer and Seller Agent

Buyer Agent

Buyer Agent

Buyer Agent

Buyer and Seller Agent

Buyer OR Seller Agent

Seller Agent

•ABC•CAH•MCK•Regionals

•OTN•Onc Supp•ASD•MCK SD•CAH SD•CurascriptSD•FFF

•Caremark•Bioscript•Acreedo•Diplomat•Biologics (MCK)•US Bioservices

•Besse•FFF•PSS•Henry Schein•MCK Medical

•Anda•(VIP)•Harvard•Par‐med•FFF

•Vizient•Premier•Healthtrust•MHA•Gerimed•PBA•IPC•Many in development

•Trxade• In progress

•UPS•Excel•DDN•ICS•CAH SPS•McKesson•Rx Crossroads

•Lash•UBC•McKesson•Sonexus•Envoy

Seller/product aggregation

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• $3.2T at a CAGR of 7% is unsustainable • 7.6% of average employers’ opex is healthcare

• Plan Sponsors want to condense the Ecosystem

• Payers cannot allow diverged Med and Rx

• Changes in Product Mix drive significant change• Scramble to sustain profit margin – musical chairs

• Channels will have to vertically integrate

• Sourcing is fragmenting and will need to be reconsidered

In Summary

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www.consultbfg.com

William RothFounding Partner

wroth@consultbfg.com678.522.3728

@rxchangeagent www.linkedin.com/in/williamroth

2/10/2017

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