社区制药业调查：社区Rx操作环境仍然具有挑战性

1、GlobalResearch11 July 2019Community Pharmacy SurveyUBS Evidence Lab Inside: Community Rx Operating Environment Remains ChallengingCommunity Pharmacy Margins Continue to be SqueezedInthesecondwaveoftheUBSEvidenceLabCommunityPharmacysurvey(datafrom151 independent pharmacies that accumulated into 2Q),

2、lower reimbursement for brandandgenericdrugsandhigheracquisitioncostforgenericsspecificallycontinueto pressure margins. Nearly 60% of respondents saw lower reimbursement for both brandedandgenericssequentially(forthethreemonthsendinginApril),andover50% haveseengenericacquisitioncostsrisefromwholesal

3、ersinthelastsixmonths(ending May). The net result is that 75% of respondents indicated their pharmacy margins remain pressured into 2Q, with nearly a quarter of the respondents describing their reimbursementbackdropastheworstreimbursementenvironmentimaginable.That said, we note front-end margins app

4、ear to be stable. The read-through is mixed for distributorsastheirpricinglooksstablebuttheirmostprofitablecustomerscontinueto weaken. We believe the pressures on the large chain pharmacies are perhapsmuted given their competitive positioning vs. theindependents.Distributor Satisfaction Among Indepe

5、ndents Wanes; MCK Highest/ABC Lowest Relative to the prior survey run, all three wholesalers experienced a decline in overall satisfaction ratings with ABC the lowest rated on average (4.4 rating out of 7) behind MCK and CAH (5.0/4.9, respectively). The decline in ratings may be a result of distribu

6、tor PSAO relationships and the higher acquisition costs for generic drugs. Despite this, very few respondents plan to move away from their GPO and/or wholesalers (largely unchanged vs. the last survey run, 8.6% vs. 8.4% previously).DIR Pressuring Margins; AMZN Muted; Pharmacy Favored vs. DME for Dia

7、betes Addingtothepressureonmargins,thesurveysuggestsDIRfeesarelargelyhigheryear- over-yearwithlessvisibilityintoDIRtrendsthantheprevioussurveyrun.Additionally, AMZN penetration remains muted for product sourcing with a marginally lower percentage of respondents expecting to begin sourcing from AMZN

8、in the next year (2%vs.4%inthelastwave).Notsurprisingly,respondentsseevalueinfillingdiabetes orders through the pharmacy vs. the DME channel, which has multiple benefits for manufacturerslikeABT,PODD,andDXCM(increasingaccess/easeofacquisitionfor customers,reducingcosttoserve,morepredictablespendi.e.

9、co-paysvs.deductibles).HealthcareAmericasEquitiesKevinCaliendoHealthcareAmericasEquities HYPERLINK mailto:kevin.caliendo +1-212-7133630Matthew Taylor, CFA HYPERLINK mailto:matthew-c.taylor +1-212-7136257Adam AssociateAnalyst HYPERLINK mailto:adam.noble Brett AssociateAnalyst HYPERLINK mailto:brett.g

10、asaway +1-212-7134820 HYPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 17. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should

11、 be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Pharmacy ReimbursementFollowing the broad reimbursement cuts from PBMs seen in January (promptin

12、g earnings guidance reductions from both CVS and WBA), we wanted to explore if reimbursementpressuresonthecommunitypharmacieshadchangedinanyway in the three months ending April 30. Overall, it appears that the environment remains challenged, with approximately three-quarters of community pharmacy ow

13、ners saying the reimbursement environment isBad to Terrible.56.3%51.7%23.2%25.8%16.6%18.5%4.6%1.3% 0.7%1.3%Figure1:Howwouldyoudescribethecurrentreimbursementenvironmentfor generic and brandeddrugs?56.3%51.7%23.2%25.8%16.6%18.5%4.6%1.3% 0.7%1.3%60%50%40%30%20%10%0%Excellent - profit margins on generi

14、csGood - profit margins on genericsNormal -pressurebutBad-profitmargins arebeingsqueezedTerrible - worst environmentarenoticeablyhigherareflatorbetterthanmanageableandimaginablethan lastlastoffsetbypurchase pricesavingsGenericsBrandedSource: UBS Evidence Lab, UBS ResearchIncrementalPBMgenericreimbur

15、sementpressureremainswidespreadwithallof thelargestpayersshowingdecreasedreimbursementinthesurvey.Figure 2: For the PBMs you contract with, how has generic reimbursement changed over the last three months (February - April) compared to the prior three months (November- January)?100%90%80%70%60%50%40

16、%30%20%10%0%CaremarkOptumHumanaPrimeMedimpact Magellan IngenioRx EnvisionRxIncreasedStayedthesameDecreasedI dont Source: UBS Evidence Lab, UBSResearch35.1%34.4%23.2%4.6%2.0%0.7%Figure 3: How has reimbursement for generics changed in the last three months (February - April) compared to the prior thre

17、e months (November - January)?35.1%34.4%23.2%4.6%2.0%0.7%50%45%40%35%30%25%20%15%5%0%Increased somewhatIncreased significantlyStayed the Decreased somewhatDecreased significantlyI dont knowSource: UBS Evidence Lab, UBS ResearchReimbursementpressureforgenericsremainswidespread,asnearly58%ofthe survey

18、ed pharmacies experienced lowerrates.52%51%31%22%17%13%8%5%Figure 4: Have you experienced any material changes in the pricing of generics purchased from your wholesaler in the last six months?52%51%31%22%17%13%8%5%60%50%40%30%20%10%0%Yes-anincreasegenericspricingYes-adecreaseingenericspricingI dont

19、knowe8 J9Source: UBS Evidence Lab, UBS ResearchCommunity pharmacies continue to see rising costs from their wholesalers with only13%ofpharmaciesclaimingreducedgenericpricesvs.51%seeingincreased prices. We believe this supports claims from ABC, MCK, and manufacturers that genericdeflationcontinuestos

20、tabilize.Also,theUBSEvidenceLabDrugPricing Monitoralsosupportsthistrend(note HYPERLINK /shared/d2m360mA4U here).Giventheimportanceofthegenerics to the pharmacies, this is ominous forprofitability.Figure 5: For the PBMs you contract with, how has branded reimbursement changed over the last three mont

21、hs (February - April) compared to the prior three months (November- January)?100%90%80%70%60%50%40%30%20%10%0%CaremarkExpress ScriptsHumanaPrimeMedimpact Magellan IngenioRx EnvisionRxIncreasedStayedthesameDecreasedI dont know Source: UBS Evidence Lab, UBSResearchWhile generic pressure tends to have

22、a more meaningful impact on pharmacy margins, we note that lower branded profitability negatively impacts margins as well.Figure 6: How has reimbursement for branded drugs changed in the last three months (February - April) compared to the prior three months (November - January)?50%46.4%34.4%13.2%2.

23、0%3.3%0.7%45%46.4%34.4%13.2%2.0%3.3%0.7%40%35%30%25%20%15%5%0%Increased somewhatIncreased significantlyStayed the Decreased somewhatDecreased significantlyI dont knowSource: UBS Evidence Lab, UBS ResearchFigure 7: How have your pharmacy sales in the last three months changed compared to the same per

24、iod last year?43% 42%30% 32%25% 24%43% 42%30% 32%25% 24%3%3%60%50%40%30%20%10%0%IncreasedNochangeDecreasedI dont knowe8J9Figure 8: How have your pharmacy profit margins changed in the last three months compared to the same period last year?59%46%26%21%16%13%11%7%70%59%46%26%21%16%13%11%7%60%50%40%30

25、%20%10%0%IncreasedNochangeDecreasedI dont knowe8JSource:UBSEvidenceLab,UBSResearchSource: UBS Evidence Lab, UBSResearchOverall, pharmacy revenue growth for community pharmacies was reported as stable (biased towards modest growth), although may lag the pharmacy growth seenatCVSandWBA(whohaveconsiste

26、ntlygrownmarketsharethroughnarrow networkandothervolume-focusedstrategies).However,despitemodesttop-line growth 60% of survey respondents indicated seeing a decline in profit margins, driven by the reimbursement pressure mentionedabove.Figure 9: How have your front-end sales in the last three months

27、 changed compared to the same period last year?59%49%23% 23%16% 14%13%4%59%49%23% 23%16% 14%13%4%60%50%40%30%20%10%0%IncreasedNochangeDecreasedI dont knowe8J9Figure 10: How have your front-end profit margins changed in the last three months compared to the same period last year?55% 56%20%18%18%15%12

28、%7%60%55% 56%20%18%18%15%12%7%50%40%30%20%10%0%IncreasedNochangeDecreasedI dont knowe8JSource:UBSEvidenceLab,UBSResearchSource: UBS Evidence Lab, UBSResearchFront-end year-over-year sales growth continues to lean modestly positive, and margins continue to remain broadly stable with roughly the same

29、amount of respondents reporting incremental margin increases vs. margin decreases since the last run of the survey.WholesalersNot surprisingly given the overall pressure on margins, pharmacy owners are increasingly dissatisfied with their wholesalers and vendors. Yet, we dont see a meaningful uptick

30、 in pharmacies looking to move out of their GPO or change wholesalers.Figure 11: Who is your pharmaceutical wholesaler(s)?34.1%33.1%29.8%29.1%27.5%25.7%22.8%17.9%40%34.1%33.1%29.8%29.1%27.5%25.7%22.8%17.9%35%30%25%20%15%10%5%0%CardinalAmerisourceBergenSep18J9McKessonOtherSource: UBS Evidence Lab, UB

31、S Research; sum 100% as respondents can select more than one wholesaler.Given the lack of overlap between the first and second waves of the survey, the figure above represents a snapshot of each survey and is likely not a fair representation of market share. Note, many independent pharmacies use sec

32、ondarywholesalers,hencethelargeOthercategory,howeverthecombinedbig three wholesalers account for 90% of survey respondents, in-line with their representation in the market.4.85.04.4Figure 12: How would you rate your wholesaler on a scale of 1-7?4.85.04.47.06.05.04.03.02.01.00.0CardinalAmerisource Be

33、rgenMcKessone8J9Source: UBS Evidence Lab, UBS ResearchThe top three wholesalers all demonstrated a lower satisfaction rating among community pharmacies when compared to their ratings from 2018, with ABC continuing to be the lowest rated among the big three wholesalers.Figure13:AreYouSatisfiedwith yo

34、ur Wholesaler CAH?Figure14:AreYouSatisfiedwith your Wholesaler ABC?Figure15:AreYouSatisfiedwith your Wholesaler MCK?100%0%9%7%11%18%84%71%e8J9%7%11%18%84%71%SatisfiedDissatisfied100%0%11%16%24%30%66%55%e8J11%16%24%30%66%55%SatisfiedDissatisfied100%0%14%14%20%86%66%e8J914%14%20%86%66%Satisfied Dissat

35、isfied NeutralSource:UBSEvidenceLab,UBSResearchSource:UBSEvidenceLab,UBSResearchSource: UBS Evidence Lab, UBSResearchNotably, satisfaction with the wholesalers has waned since the last run of the survey. Inthefigurebelow,welayoutthepercentageofdissatisfiedrespondents foreachwholesalerwhoselectedPric

36、e/Value,Products,andServiceasareasonfor their dissatisfaction.Figure 16: Wholesaler Dissatisfaction Rates by Category and Vendor90%80%70%60%50%40%30%20%10%0%CAHPrice/ValueABCServiceMCKSource: UBS Evidence Lab, UBS ResearchFigure 17: Are you planning to change your pharmaceutical wholesaler or have y

37、ou changed within the last 6 months?100%8.6%8.4%70.9%75.4%20.5%16.2%90%8.6%8.4%70.9%75.4%20.5%16.2%80%70%60%50%40%30%20%10%0%Sep18eNI t J9Source: UBS Evidence Lab, UBS ResearchDespitethelowersatisfactionratingsvs.thelastrunofthesurvey,therewasnota material change in the percent of community pharmaci

38、es who are looking to switch or have recently switchedwholesalers.Figure 18: Are you part of Group Purchasing Organization (GPO) or cooperative buying association to maximize your pharmacys buying power?100%77.8%78.8%19.9%20.4%90%77.8%78.8%19.9%20.4%80%70%60%50%40%30%20%10%0%Sep18JYesNoI dont knowSo

39、urce: UBS Evidence Lab, UBS ResearchAlmost 80% of community pharmacies are part of a GPO. There has been no material shift in the percent of pharmacies that are part of a GPO within the past year. AnecdotalevidenceandUBSchannelcheckssuggesttheGPOmarkethas remained stable in terms of share shift.Phar

40、macy ServicesDIR fees have been a key lobbying point for the independent pharmacy industry and remain a pain point for independent pharmacy profitability. CMS did not changeDIRrulesearlierthisSpring,butthereishopeCongresscanlegislatethem out as part of drug reform later this Summer.Figure19:Wereyour

41、DIRFeeshigherorlowerin2019 compared to2018?19.8%14.6%29.1%28.1%4.6%6.0%46.1%51.7%100%19.8%14.6%29.1%28.1%4.6%6.0%46.1%51.7%0%e8J9HigherLowerAboutthesameI dont knowFigure 20: Do you feel you have better or worse visibility on your DIR fees now than you did last year?7.2%10.6%15.0%31.1%64.1%49.7%8.6%1

42、3.8%100%7.2%10.6%15.0%31.1%64.1%49.7%8.6%13.8%0%e8J9BettervisibilityWorse visibility AboutthesameI dont knowSource:UBSEvidenceLab,UBSResearchSource: UBS Evidence Lab, UBSResearchAbout half of community pharmacies are continuing to see their DIR fees rise when compared to the previous year. This is l

43、ess of an issue for CVS and WBA, who have better visibility into DIR fees and can perhaps negotiate better terms with PBMs.Other, 7.8%Other, 4.0%Optum, 13.9%Optum, 16.2%Express 12.0%ExpressScripts, 11.9%CVS Caremark, 50.3%CVS Caremark, 56.3%Figure21:WhichPBMdoyouthinkisthemostaggressiveintermsofOthe

44、r, 7.8%Other, 4.0%Optum, 13.9%Optum, 16.2%Express 12.0%ExpressScripts, 11.9%CVS Caremark, 50.3%CVS Caremark, 56.3%100%I dont know,I dont know,90%13.8%13.9%80%70%60%50%40%30%20%10%0%Sep18J9Source: UBS Evidence Lab, UBS ResearchCVScontinuestobethemostaggressiveinchargingDIRfeeswithnearly60%of pharmaci

45、es sharing this view in 2019.Figure22:AreyoupartofaPSAO?Figure23:DoyouthinkyourPSAOdoesagoodjob negotiating rates on yourbehalf?100%I know, 21%Yes, 28%I know, 21%Yes, 28%No, 51%I dont know, 18%I dont know, 19%No, 14%No, 22%Yes, 68%Yes, 59%80%70%60%50%40%30%20%10%0%e8JSource:UBSEvidenceLab,UBSResearc

46、hSource: UBS Evidence Lab, UBSResearchTherehasbeena9%decreaseincommunitypharmacieswhoclaimtobepartofa PSAO compared to 2018. Of the pharmacies that are part of a PSAO, only 28% believe the PSAO is doing a good job negotiating on their behalf in 2019. We note, some of the dissatisfaction with wholesa

47、lers could come from the fact that they own and operate PSAOs.Materially negative, 11%Materially negative, Materially negative, 11%Materially negative, 16%Slightly Negative, 31%Slightly Negative, 29%Not at all, 16%Not at all, 20%Slightly positive, 31%Slightly positive, 29%Materially positive, 10%Mat

48、erially positive,7%100%90%80%70%60%50%40%30%20%10%0%Sep18JSource: UBS Evidence Lab, UBS ResearchPharmacieshavebecomeslightlylesspositiveinregardstotheiroutlookonCMS proposalstoeliminaterebatesandlowerAWP.36%ofpharmacieshaveapositive outlook on these proposals in 2019 compared to 41% of pharmacies ha

49、ving a positive outlook in 2018. In addition, 16% now view this as a materially negative event vs. 11% in 2018. As HYPERLINK /shared/d299O5CqgDx we have written, we believe the Rebate Rule, once proposed,willbedelayedthroughlegislationinordertousethebudgetarysavings to help pay for other healthcare

50、proposals.Figure 25: Do you offer homedeliveryservices?Figure 26: Do you plan on offering home deliveryservicesin the next year?100%0%e8J9YesYes, 70%Yes, 72%No, 31%No, 28%No 98% 2%Yes, 70%Yes, 72%No, 31%No, 28%No 98%Source:UBSEvidenceLab,UBSResearchSource: UBS Evidence Lab, UBSResearchAbout70%ofphar

51、maciesofferhomedeliveryservices.Ofthepharmaciesthatdo notofferhomedeliveryservicesin2019,only2%willplanonofferingthisservice next year.Figure 27: Do you use Amazon to sourceany products?Figure 28: Do you have plans to source from Amazoninthe next year?100%100%Idont90%90%know,12%k I dont%now, 1980%80

52、%70%70%60%50%40%30%20%10%0%Yes, 17%Yes, 17%No, 82%No, 81%No, 79%No, 84%Sep18Yes, 17%Yes, 17%No, 82%No, 81%No, 79%No, 84%J960%50%40%30%20%10%0%Sep18J9eNI t weNI t wSource:UBSEvidenceLab,UBSResearchSource: UBS Evidence Lab, UBSResearchOnly17%ofpharmaciesarecurrentlyusingAmazontopurchaseproducts.Figure

53、 28 above demonstrates that this trend of foregoing partnering with Amazon will likely continue in the future.Figure 29: Do you have an automated POS couponing service?Figure 30: If there is a lower cash price for a prescription drug offered somewhere else, will you match that cash price if its chea

54、per than a customers covered cost at your pharmacy?100%0%No, 85%No, 89%Yes, 11%Yes,9%e8JNo, 85%No, 89%Yes, 11%Yes,9%eNI t w100%0%Yes, 42%Yes, 42%Sometimes, 23%Sometimes, 27%No, 31%No, 35%e8JYes, 42%Yes, 42%Sometimes, 23%Sometimes, 27%No, 31%No, 35%Source:UBSEvidenceLab,UBSResearchSource: UBS Evidenc

55、e Lab, UBSResearchWe note, the large retail chains are increasingly using POS couponing and matchingprice,potentiallygivingthemapricingadvantageovertheindependents.Figure 31: How often do you do match lower cash prices for your customers prescription drugs?100%Very Rarely, 21%Never, 14%Very Rarely,

56、21%Never, 14%Very Rarely, 28%Rarely, 27%Rarely, 18%Occasionally, 41%Occasionally, 35%10%6%80%70%60%50%40%30%20%10%0%Sep18VeryfrequentlyOccasionallyJVeryRarelySource: UBS Evidence Lab, UBS ResearchVery few pharmacies have POS systems that will find coupons for customer purchases. If the customer does

57、 find a lower price, approximately 40% of pharmacieswillacceptthelowerpriceofferedfromthecustomer,adecreasefrom50% seen in 2018.I dont 22%No 14%Yes 64%Figure 32: In the diabetes market, do you think there is an advantage for patients filling orders through the pharmacy channel versus the DME channel

58、?I dont 22%No 14%Yes 64%Source: UBS Evidence Lab, UBS ResearchNotsurprisingly,surveyrespondentsseealotofvalueinfillingordersthroughthe pharmacyversustheDMEchannel,whichsquareswithcommentsfromdiabetes manufacturerslikeABT,PODD,andDXCMthatarelookingtoshiftvolumestothe pharmacy. In our view, the move t

59、o the pharmacy has multiple benefits for these players including a) increasing access/ease of acquisition for customers; b) reducing the cost to serve; c) more predictable spend given co-pays vs. deductibles. The move to the pharmacy channel is a big source of potential savings. In the DME channel,g

60、ettingaproductisan8stepprocessthattakesmultipleweeks. Thiscan be taken down to 1-2 days in the pharmacy with fewersteps.Atthisstage,basedonIMSdata,wethinkABTisseeingthebiggestbenefitfrom thepharmacy,withPODDbeginningtobreakinwithitsDASHproductandDXCM alsomakingapush. IntheUS,ABTcontinuestoworkhardon