By Daniel Shvartsman
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A couple weeks ago, we talked about Walgreens Boots Alliance (WBA), which trades at a value multiple despite growing revenue. That's a sign of deeper issues in the industry, and we tried to pick that apart and understand what's going on. But, as the old saw goes, there's almost no one who really understands the payment flow in the healthcare industry without studying it full time.
So this week I spoke with Ed Silverman. He's been tracking the pharma industry for over two decades, and has run the blog Pharmalot for over a decade. Now on StatNews, he has, as he said on the podcast, been tracking these issues for a long time. He doesn't cover Walgreens precisely, but he has a detailed understanding of what's going on, so I tried to get deeper into the issue.
We hit on some of the high level political pressures that are manifesting in the industry. One of the disconnects that stands out is how drug makers and pharmacy benefit managers get more heat from Washington, even as consumers feel the pain (and share the pain) more in dealing with their insurance providers and their retail pharmacies. We also talk about what Amazon's (AMZN) entry might do for the industry, and what recent consolidation has done so far. Click play above to listen.
Topics covered:
- 2:30 minute mark - The nature of the pressure facing the pharmaceutical industry as a whole
- 8:00 - Breaking down the reimbursement pressures
- 12:00 - Solutions to lowering drug costs, and where pharmacy benefits managers fit in
- 17:30 - Industry consolidation and Amazon as two tectonic shifts
- 26:00 - Generics as a clue to the rest of the industry
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