the healthcare supply chain - pepperdine university · four disruptions in the healthcare supply...
TRANSCRIPT
Today’s Agenda
AmerisourceBergen: A Quick Primer
Four Disruptions in the Healthcare Supply Chain
Part 1
Part 2
Where Do We See Opportunities to Shape Healthcare Delivery? Part 3
Q&A Part 4
Provide more than 70,000 healthcare facilities with the right medication and supplies overnight.
Deliver over 1.5 million product lines from our 30+ distribution centers, located in the United States and Puerto Rico.
Help millions of patients safely receive the treatments they need for timely, successful care.
Historic Growth for the Company
FY 2014 FY 2013 Change
Revenue
Gross Profit
Operating Income
Adjusted EPS
$119,569
$3,306
$1,556
$3.97
$87,959
$2,762
$1,290
$3.21
36%
20%
21%
24%
A Monumental Deal Among Industry Titans
Potentially transformational for ABC, creating a wholesaler with the broadest global reach.
The long-term relationship—both smart and unprecedented.
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Has the potential to transform the pharmaceutical supply industry on a global basis.
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Deal transforms global pill pipeline. Groundbreaking global partnership.
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Solutions that Span The Industry’s Needs
Largest breadth and depth of commercialization services #1 provider in virtually every offering
About Me
Born in South Africa
Graduate of the University of Witwatersrand in Johannesburg with a degree in accounting
Lieutenant in the South African Air Force
Came to California in 1989 to work for an orthopedics distribution company
Joined Alternate Site Distributors (ASD) Healthcare in 1994 as the general manager
About Me
President of Bergen Brunswig Specialty Group in 1999
President, AmerisourceBergen Specialty Group (ABSG) following the merger of Amerisource Health and Bergen Brunswig in 2001
President of AmerisourceBergen Drug Corporation (ABDC) in 2009
President and CEO of AmerisourceBergen (ABC) in 2011
Global Spending on Drugs Will Reach about $1.3 Trillion by 2018 Global Sales and Growth, 2009-2018
Source: IMS Health Market Prognosis, Sept. 2014, at ex-manufacturer price levels, not including rebates and discounts
Provider Consolidation and Integration Continues
Source: Kaufman, Hall and Associates, February 2015
Source: The Health Care M&A Information Source, February 2015
Physician Employment Trends (2008-2013)
Physicians have been leaving independent practice for hospital-employment.
However, majority of physicians are still practicing in an independent setting.
Health System Pharmacy Challenges
Generic price spikes
Drug shortages
Specialty distribution shift
340B coordination
Cost management—especially for specialty medications
Shifting Site of Care: Key Takeaways
Issue runs deeper than just where products are delivered and administered
Regardless of where care is delivered, supply chain partners must be nimble enough to respond in a value-additive way
Market change creates increased needs for solutions that align with customer business goals
Virtual Care and Telehealth
Telehealth is a potential solution for challenges created as a result of an aging population and an increase in chronic disease states.
Additional benefits include an increase in quality care and decrease in healthcare expenditures.
Source: “Global Markets for Telemedicine Technologies,” BCC Research, available at http://www.bccresearch.com/; “Global Telehealth Market Set to Expand Tenfold by 2018
Changing Patient Population: Key Takeaways
Patient population growing in size and complexity
Aligning services with patient expectations will be key—not just for supply chain partners, but for all healthcare stakeholders
Reach and scale will still be key
Launch influenced by: Regulatory approval Patent challenges Commercial acceptance Interchangeability
Biosimilars: Key Takeaways
Still playing the waiting game for the big biosimilars rush
But waiting does not equate with inactivity
Winners will be determined by who’s best prepared to serve full spectrum of needs—both distribution and commercialization
Emergency Room Usage by Country
Source: 2013 Commonwealth Fund International Health Policy Survey in Eleven Countries.
Source: National Pharmaceutical Council
An Accountable Care Organization (ACO) is a group of health care providers who work to deliver coordinated care
and are collectively accountable for the cost and quality of care.
ACOs have the potential to improve the quality of care and lower costs.
To show success, ACOs must report on
specific quality measures.
A Shift from “Fee-for-service” to “Value-based” Care as a Result of the Affordable Care Act
Source: HIDA: “Healthcare Supply Chain 2015” Source: MM&M-online: Health systems are embracing value-based care: survey, December 2014.
Projected 2015 Private Health Insurance Spending Inpatient and professional services account for the largest amount of private health insurance spending
Source: PwC Health Research Institute, Medical cost trend: Behind the numbers 2015, June 2014 analysis based on the 2014 Millman Medical Index
The Hepatitis C Marketplace
A leading manufacturer planned to launch their Hepatitis C drug via limited distribution
They made the decision to instead launch full line wholesale
The result was expanded patient access and arguably the most successful healthcare product launch of this century
Financial Impact of New Hepatitis C Therapies 2015 – 2016 is the highest cumulative impact on benefit costs for employer plans
Source: PwC Health Research Institute estimate based on National Health and Nutrition Examination Survey and 2012 Truven claims data from employers23
Balancing Cost vs. Quality: Key Takeaways
Smarter spending—not just reduced spending
Results matter just as much as (or even more than) procedures
Support needed for providers entering into ACOs and other care coordination models
The community pharmacy industry represents 37% of all retail pharmacies in the US, an estimated $89 billion in annual revenue.
Top three disease state management services offered at a community pharmacy are immunizations, blood pressure monitoring and diabetes training.
Pharmacists play an increasingly important role in public health and many states are expanding the role of the pharmacist as provider.
The Independent Community Pharmacy
Source: IMS Health Data
Independents Remain a Formidable Presence
Customer Utilization of Pharmacies, by Dispensing Format, 2014
Dispensing Format 2012 2013 % Change 2012 2013 % Change
Prescriptions (millions) Share of Prescriptions
Chain drugstores 1,885 1,947 +3.3% 44.0% 45.3% +135 b.p.
Independent drugstores 723 719 -0.6% 16.9% 16.7% -13 b.p.
Mass merchants with pharmacies 439 442 +0.7% 10.2% 10.3% +5 b.p.
Supermarkets with pharmacies 522 536 +2.7% 12.2% 12.5% +30 b.p.
Mail pharmacies1 717 651 -9.2% 16.7% 15.2% -157 b.p.
Total 4,286 4,295 +0.2% 100.0% 100.0%
1. Excludes Tricare prescriptions. Prescription data for mail pharmacies show Equivalent Scripts (Actual Scripts x 3) Totals may not sum due to rounding. b.p. = Basis Point (one hundredth of one percent; 0.01%) Source: Pembroke Consulting analysis of IMS Health data; Pembroke Consulting estimates
Source: 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies, Drug Channels Institute, January 2014.
Independent Community Pharmacy Market Share of Prescription Revenues, 2013
Customer Satisfaction with Pharmacies
Customer Satisfaction with Pharmacies, by Dispensing Format, 2014 Customer Satisfaction Index Ranking (based on a 1,000-point scale)
Source: Pembroke Consulting analysis of 2014 U.S. National Pharmacy Study, J.D. Power and Associates, September 2014
Commitment to Oncology
Competitive Pricing on Products
Industry-leading and
industry-pioneering GPO structure in oncology
Ensuring reliable access to medications
Actionable Data and Analytics
Helping practices learn
more about themselves so they can care for patients more effectively
Data-driven care and operations
Information and Amplification
Educating practices on the
latest clinical and operational insights
Amplifying their voice to communicate their perspective to lawmakers and regulators
Not a one-size-fits-all approach Combine global best practices with localized
expertise and resources to create customized solutions for manufacturers
Unique markets demand unique, tailored approaches
Leveraging global presence to expand commercial operations (Australia 3PL). Leveraging ABC to expand clinical services (Cubixx).
Joint venture to merge local knowledge of Brazil market with proven solutions and approaches from U.S. and Canada.
Exploring how product commercialization lessons learned in Canada can be applied elsewhere—while continuing to improve operational excellence.
Animal Health Market Overview
The global animal health industry is worth an estimated $100 billion
The pharma segment globally is ~ $22bn, U.S. Market is $8bn)
Demographics 10,000 baby-boomers turning 65 every day until 2029.
Drug Innovation New drugs coming to market.
Healthy Drug Pricing Environment Specific to BRx and GRx.
2/3 of U.S. households now own a pet.
Demographics 10,000 baby-boomers turning 65 every day until 2029.
Aging Population
Take More Rx Drugs
Live Longer
Get A Pet