Megadeal Unites Drug Rivals Essay

Finally, in a February 2012 proposed regulation, CMS proposed that state Medicaid agencies reimburse pharmacies for retail drugs based on actual acquisition cost. CMS recognized, however, that states may not be able to determine the actual price paid by a pharmacy for a drug billed to Medicaid, so it suggested that states survey pharmacies or rely on other data to calculate an average acquisition cost for drugs purchased and billed by retail community pharmacies. The article reviewed the association between benefit caps, prescription drug use, and the costs associated. It also detailed drug cost sharing, additional medical costs, and specific health outcomes. Using observational data, the studies analyzed the changes and did a cost comparison of outcomes at two points of time, before and after the pharmaceutical benefits changed. The article detailed the impact of pharmaceutical drugs was often difficult to analyze because some data analyzed utilization while others analyzed actual pharmaceutical spending. The data surrounding utilization compared as many as five factors such proportion

The Medicare beneficiaries’ contribution to the coverage gap decreases each year, with the majority of cost absorbed by the government and the drug manufacturers. Drug manufacturers also agreed to pay a fee to the federal government health care programs on branded prescription drugs (BPD), based on its sales of BPD’s. There was an expansion of the Public Health Service Act (PHSA), that required drug manufactures to provide eligible entities with significantly reduced drug price. The PHSA, also expanded those entities such as free-standing cancer centers and critical access hospitals (CAH), that were eligible to participate in the 340B program In, addition they also agreed to increase rebates on sales of prescription drugs to the Medicaid program (Spats, 2010). The rebate was increased from 15.1 percent to 23.1 percent. In addition, drugs, such as those used for pediatric care and clotting factor drugs there was a 17.1% rebate. Perhaps, most importantly, the firms extended the rebates to Medicaid patients enrolled in Managed Care Organizations (MCO). This new agreement allows plans to negotiate rebates in addition to the new ones

Regulations that prevent insurance companies from participating in interstate commerce have caused competition to grow stagnant in the United States. This lack of competition has allowed the adoption of wasteful procedures by healthcare providers, which in turn passes the increased expenses back to the insurance companies. Therein, insurance costs increase, crippling consumer’s cash flow and quality of life. While healthcare costs continue to rise, people must scrutinize the current healthcare system.

A broader view of objectives indicate that long-term opportunities exist in areas such as supply chain improvement, acquisition synergies, and increased pharmaceutical sales. The merger with Alliance Boots provides a ripe platform for negotiation

Author of the article examines on how managed care have enabled health insurance markets, physicians, and healthcare facilities consolidate as well as change in the responses to health care reform. The article claims that stricter antitrust enforcement concepts will benefits consumers only in a situation where competitive distortions will get government

Competition is forcing consolidation of health insurers. Two years ago, there were fifteen major for-profit insurance plans that controlled the national market. They have consolidated into nine players, and further changes are predicted. (Singh & Sawhney, 2006)

In fact, in a recent survey of health care leaders, 90% indicated they have intentions to pursue a population health strategy (Gamble & Sachs, 2015). While there is evidence that ACO’s are saving money, most of the cost savings are coming from physician run ACO’s (Steckler, Feldman, & Watts, 2015). In comparison, ACO’s run by integrated health systems are saving relatively little money (Williams, 2016). Even the Federal Trade Commission (FTC) is wary of the intentions of healthcare leaders who claim the pursuit of population health management as a goal of consolidation. The FTC’s skepticism of population health management was demonstrated when they blocked an acquisition of a 43-physician practice by St. Luke’s Health System in Boise, Idaho. Regulators stated that the acquisition was anticompetitive and would lead to higher prices (Galewltz,

The article “What the CVS-Aetna deal means for the future of health care,” by Carolyn Y. Johnson, introduces the proposed merger between CVS and Aetna. CVS is the largest pharmacy chain in the United States and Aetna is the third largest health insurer in the United States, which will create a business partnership that could transform how healthcare is dealt with in this country. Overall, the article was neutral in its reporting. It presented both the advantages as well as the drawbacks of this deal. The short term advantages of this deal would be that copays may initially be low for customers of both CVS and Aetna. This may lead to more affordable medications, but this is completely dependent on their choice to lower or raise prices. However,

A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate

Although Anthem is regarded as highly lucrative, the company’s profit margins are extremely low due to the highly competitive and regulated industry. Because there is limited opportunities for market growth, health insurance companies remain competitive by merging with other companies. Anthem is currently in the process of finalizing an acquisition deal with Cigna. This deal has been faced with much scrutiny and pushback from government due to monopoly regulations. If the deal does not go through, Anthem will have to pay a large penalty fee to Cigna. Along with this financial cost, Anthem would also lose time and resources that they have dedicated to this strategy over the past two years. Because of the competitive environment and high stakes, Anthem began cutting costs throughout the company.

The Pharmaceutical industry has been in the spotlight for decades due to the fact that they have a reputation for being unethical in its marketing strategies. In The Washington Post Shannon Brownlee (2008) states, “We try never to forget that medicine is for the people. It is not for the profits. The profits follow.” This honorable statement is completely lost in today’s world of pharmaceutical marketing tactics. These tactics are often deceptive and biased. Big Pharma consistently forgets their moral purpose and focuses primarily on the almighty dollar. Big Pharma is working on restoring their reputation by reforming their ethical code of conduct.

In conclusion, the potential to seek outside organizations to merge with in the near future would be of great benefit to both this company and this economy, nevertheless, the Federal Trade Commission has been very bias in regards to any mergers within the healthcare market. The anti-trust laws are very important within this country regarding policies pertaining to mergers within the market and focusing on any increases on prices of services that are offered to the public. Throughout this process it is vital to research to right approach to take regarding this merger in order to not have any violations of anti-trust policies throughout this venture.

Another form of competition that takes places exists between hospitals and hospital groups. Hospitals compete for physicians and other health care professionals, third-party payers and patients. Hospitals often compete for patients by providing more services, better amenities or discounted prices (Rivers & Glover, 2008, pp.634). This exists both locally and globally and this competition is only getting stronger given the advanced research and technology that is now available. In healthcare, the reality remains that the hospitals want to have the best technology and newest medical discoveries in order to recruit the best healthcare providers and personnel. The final form of competition takes place between organizations that provide health care financing and insurance and health care plans such as HMO’s and PPO’s. “Buyers of insurance plans must be knowledgeable about the varying prices and must be able to make an informed choice when deciding on what plans to buy (Rivers & Glover, 2008, pp.634-35).” Health plans can be confusing and loaded with an over-abundant amount of information. Furthermore, it can be difficult and daunting for a patient to compare the different plans available to them in that there are varying degrees of freedoms in different categories of the

From the passage of the Patient Protection and Affordable Care Act in 2010 through the end of last year, merger and acquisition transactions involving acute-care hospitals increased 55% from 66 announced deals to 102 (Barlas, 2014). This movement is increasing for reasons that are evident. For providers, it is becoming a challenging environment to be a small medical practice. The system is going through a difficult switch to electronic medical records, which is expensive and requires specialized experience to avoid downsides. These challenges push physicians to pursue employment in large organizations rather than solo ownerships or partnerships in small

In all industries, competition among businesses has long been encouraged as a mechanism to increase value for patients. In other words, competition ensures the provision of better products and services to satisfy the needs of customers (Glover & Rivers, 2009). In the health care industry, competition has an impact on many relational perspectives. There have been several studies examining the relationships between competition and quality of health care, competition and health care system costs, and competition and patient satisfaction. Some elements of competition in health care are price, quality, convenience, and superior products and