DAILY UPDATE: Express Scripts & CVS, HHS and the Roaring Stock Markets

MEDICAL EXECUTIVE-POST TODAY’S NEWSLETTER BRIEFING

***

Essays, Opinions and Curated News in Health Economics, Investing, Business, Management and Financial Planning for Physician Entrepreneurs and their Savvy Advisors and Consultants

Serving Almost One Million Doctors, Financial Advisors and Medical Management Consultants Daily

A Partner of the Institute of Medical Business Advisors , Inc.

http://www.MedicalBusinessAdvisors.com

SPONSORED BY: Marcinko & Associates, Inc.

***

http://www.MarcinkoAssociates.com

Daily Update Provided By Staff Reporters Since 2007.
How May We Serve You?
© Copyright Institute of Medical Business Advisors, Inc. All rights reserved. 2025

REFER A COLLEAGUE: MarcinkoAdvisors@outlook.com

SPONSORSHIPS AVAILABLE: https://medicalexecutivepost.com/sponsors/

ADVERTISE ON THE ME-P: https://tinyurl.com/ytb5955z

Your Referral Count -0-

CITE: https://www.r2library.com/Resource

Express Scripts and CVS, which owns Caremark, are suing Arkansas after it instituted a law banning vertical integration between pharmacies and PBMs

CITE: https://tinyurl.com/2h47urt5

🟢 What’s up

  • Circle Internet Group, the stablecoin issuer, followed up its epic IPO day on Thursday with another banger, soaring 29.80%.
  • Coreweave closed out a roller coaster week with a 3.78% gain. The recently public AI cloud computing company is up 158% in the past month, and its tie-up with Applied Digital boosted that stock by another 8.54% today.
  • Rocket Lab (+9.34%) was one of several SpaceX competitors to receive a small boost following Elon Musk’s blowup with President Trump, which could threaten SpaceX’s contracts with the government.
  • Omada continued the strong run of recent IPOs. The virtual chronic care company jumped 21.05% in its debut on the Nasdaq today.

What’s down

  • Lululemon plunged 19.80% after cutting its full-year guidance due to the “dynamic macroenvironment” (CEO-speak for tariff uncertainty and people opting for baggier clothes than yoga pants). The company said it will increase prices on some items to offset the tariffs.
  • Docusign tanked 18.97% after warning that its billings for the year would come in lower than estimates as it transitions to an AI-driven model.
  • Broadcom failed to live up to exceedingly lofty expectations for its Q3 revenue forecast, causing shares of the giant semiconductor supplier to dip 5%.

CITE: https://tinyurl.com/tj8smmes

Stat: $16 billion. That’s how much an HHS watchdog found in health program overspending, fraudulent billing, and possible cost savings in a six-month span. (Axios)

Visualize: How private equity tangled banks in a web of debt, from the Financial Times.

COMMENTS APPRECIATED

PLEASE SUBSCRIBE: MarcinkoAdvisors@outlook.com

Thank You

***

***

***

***

EDUCATIONAL TEXTBOOKS: https://tinyurl.com/4zdxuuwf

***

PODCASTS: How Prescription [Rx] Coverage Works

Formulary Tiers, PBM, Rebates, Spread-Pricing Explained

By Dr. Eric Bricker MD

***

***

CITE: https://www.r2library.com/Resource/Title/082610254

***

***

***
YOUR COMMENTS ARE APPRECIATED.

Thank You

***

Pharmaceutical Stocks in the Post-Trump Era?

Join Our Mailing List

By Vitaliy Katsenelson CFA

vitaly

Trumps Hates Them – We Love Them

 Originally written for Institutional Investor Magazine
 A few weeks after Donald Trump was elected president of the United States, he was asked about pharmaceuticals prices. With typical rhetorical gusto, he declared, “Pharmaceutical companies are getting away with murder.” Well, my firm has been increasing our allocation to those “murderers,” and despite Mr. Trump’s comments, we are very comfortable with our positions in the long run (which lies beyond what may end up being a very volatile short run).

Big Pharma

Pharmaceuticals companies check off a lot of boxes in our quality and growth dimensions. They are usually monopolies or oligopolies when it comes to their specific drugs; they have high recurrence of revenue; their business is not cyclic and thus marches to its own drummer; they have strong balance sheets and a high return on capital, and generate a lot of cash flow; they benefit from a significant growth tailwind as the global population ages (I aged just while writing this); and they enjoy pricing power (more on that later). Yet the pharmaceuticals sector as a whole has been decimated over the past eight months due to perceived political risk — first by pharma pricing critic Hillary Clinton’s “It’s in the bag” expectation of victory and then by Trump’s “They get away with murder” comments. We view the carnage created by the political risk as an opportunity to increase our exposure to this sector. Here is why.

President Trump mentioned that he wants the U.S. government — mainly, its Medicare program — to negotiate directly with drug-makers on price. His remark may create the impression that pharmaceuticals companies today charge the government whatever prices they want. That is not the case. Medicare covers prescription drug costs through a program known as Medicare Part D. Medicare basically outsources the negotiation of drug prices to pharmacy benefit management (PBM) companies such as CVS, Express Scripts, and UnitedHealth Group (a health insurance company that owns its own PBM). In fact, less than a handful of PBMs control this market and so exercise tremendous pricing power; thus the government is already negotiating with pharmaceuticals companies.

The Stats

Here are some useful stats about this market: As of the end of 2015, 290 million Americans had health insurance. Among them, 214 million had private insurance and 52 million were insured by Medicare. Medicare insures a lot of people; however, UnitedHealth — a company whose business model relies on paying as little as possible for prescriptions — insures 70 million Americans and thus already has greater bargaining power than Medicare.

But let’s say President Trump gets his wish, the law is changed, and the government bypasses PBMs and starts bargaining with Gilead Sciences, Amgen, and Allergan directly — the Trump take-no-prisoners approach. Let’s even assume that President Trump’s ingenious negotiating techniques result in a 20 percent concession on price. Since Medicare represents only 18 percent of the total insured population, the net impact on pharmaceuticals companies’ revenue would be 3.6 percent. That’s a small pimple that they’d be able to cover up by raising prices 4 percent on the remaining 82 percent of payers.

***

drugs

***

Europeans and Canadians

The reality is that the reason Europeans and Canadians are paying much lower prices for their prescriptions is that they have a single-payer system, and thus pharmaceuticals companies are bargaining not with four or five entities but with one: the government. At this stage, however, it is very unlikely that a Republican president and Republican-controlled Congress will move this country to a single-payer system.

If the U.S. starts allowing re-importation of pharmaceuticals from Canada and Europe — another threat made by our president — then American companies will simply start raising prices outside of the United States.

Finally, let’s remember an important but often forgotten fact: Donald Trump is the president of the U.S.; he is not its king and doesn’t have the powers of one. Although we expect his tweets and other remarks to create additional volatility, they will not necessarily have a symmetrical impact on pharmaceuticals companies or whatever other businesses he tweets about.

Assessment

We have taken advantage of price weakness and added to our positions in Amgen (analysis here), Allergan (analysis here), and Gilead (analysis here). We also bought some new positions. Stay tuned for next week, when I’ll reveal those names.

Conclusion

Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com

OUR OTHER PRINT BOOKS AND RELATED INFORMATION SOURCES:

Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™

***

Extortion Argument for HIT De-Identification

A Really Scary Tale

By D. Kellus Pruitt; DDSpruitt

Upon arriving at the office early one morning recently, Dr. Smith logged on to the Internet to check her email. Among the usual pieces of junk email, one from Nigeria caught her eye. She recognized the name of one of her patients, written in bold letters. She thought, “That’s odd.” Smith opened the email to read more.

The Threat 

“I am revealing the name of your patient, who lives on Oak Street, as proof that your computer has been hacked. I have social security numbers, birthdates, insurance information … You name it, and I’ve got it. It will go on the market in 24 hours if you do not do exactly what I say …” (This is the start of price negotiations – for the first time).

The Decision 

What will Dr. Smith do? At the very best, she can hope that it’s a bluff. Nevertheless she must contact not only the FBI, but every one of her patients who are at risk of identity theft. That alone will bankrupt her practice because a large portion of her patients will never return. They will look for dentists with paper records. The very worse thing she could do is pay the ransom. In the end, how much did the bad guy risk to destroy a wonderful career, even if it was a bluff, or a devastatingly mean trick? You can relax now; this story is fiction. Here is the non-fiction.

NEWS FLASH!

“Script said the new letters were received by Express Script clients in recent days and is similar to the letter it first received. That letter included personal information on 75 people covered by Express Scripts, including birth dates, social security numbers and prescription information. The sender demanded money from the company, under the threat of exposing records of millions of patients.” – BusinessWeek [11.11.08]

More: http://www.businessweek.com/ap/financialnews/D94CVLJO0.htm

Lose the Threat 

Dentists must lose this danger or lose their computers. Let’s temporarily put aside our dreams about how wonderful technology might become and open our minds to ways to go around insurmountable obstacles instead of pretending everything is wonderful in stakeholder land. For once, let’s seriously look into de-identifying our patients’ electronic dental records already. Forget about HIPAA and inspections. Forget about AHIC Successor Inc. Forget about CCHIT, CMS and even the HHS. Forget about Newt Gingrich and the past, present and future Presidents of the American Dental Association who prefer to be irrelevant than to discuss anything bad about electronic dental records. And especially forget, with prejudice, executives of dental insurance companies who demand interoperability on their NPI-driven terms. Let’s sidestep the biggest mistake in healthcare history. It does not have to be ours.

More Info:  Dictionary of Health Information Technology and Security 

www.HealthDictionarySeries.com

Not a Fete’ Accompli 

Some leaders who have poor understanding of the modern marketplace would lead ADA members to believe that there is nothing that can be done to stop eHRs in the United States of America, no matter how expensive, dangerous and lousy stakeholder interests make them. Why; “cause I said so?”

Example:

Let me give you an example: “If we don’t participate, then who knows what will happen regarding the dental part of the eHR? eHR is on the way.” – Dr. John S. Findley, President of the ADA in “President-Elect’s Interview: Part 2,” ADA News Online (ADA members only).

More: http://adabei.com/members/resources/pubs/adanews/081006_findley.asp

If we don’t participate, Dr. Findley, dentistry will proceed with safe paper records like it has for a century or so.  I have clearly shown that far worse things could happen.  Shouldn’t we “first do no-harm” to our dental patients?  What happened to the ethics of the American Dental Association?

Stakeholder Optimism 

Even though optimistic stakeholders, hobbyists and hangers-on disagree with me, electronic dental records are not inevitable. At least they are not inevitable in the next decade or so.  They can easily become so lousy and so mistrusted by doctors and patients alike that they will set back miracles from Open Source Evidence-Based Dentistry forever. They are almost there already because of ambitious stakeholders, hobbyists and slow-moving hangers-on; like Dr. John S. Findley.

Assessment

Remember, decades ago the US was supposed to be on the metric system.  Sometimes inevitability takes so long that you might as well just forget about it.  And, the metric system even makes sense.

Conclusion

Unlike medical records which must remain secure even if de-identified, nobody, I repeat, nobody cares about breached dental histories. Physicians may have no choice. Dentists do! As always, your thoughts and comments on this Executive-Post are appreciated.

Related Information Sources:

Practice Management: http://www.springerpub.com/prod.aspx?prod_id=23759

Physician Financial Planning: http://www.jbpub.com/catalog/0763745790

Medical Risk Management: http://www.jbpub.com/catalog/9780763733421

Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com  or Bio: www.stpub.com/pubs/authors/MARCINKO.htm

Subscribe Now: Did you like this Executive-Post, or find it helpful, interesting and informative? Want to get the latest E-Ps delivered to your email box each morning? Just subscribe using the link below. You can unsubscribe at any time. Security is assured.

Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos