THREE THINGS THAT MAY AFFECT YOUR HEALTH IN 2016

Pharmaceutical Industry Executive Reacts to Amazon, Kaiser Permanente and 

Valeant News

By: Adam Runsdorf, President, WDSrx

Successful businesses in the life sciences and transportation industries anticipate future trends in order to maintain relevance in a changing market.  At WDSrx, our organization is focused on the fast, safe and efficient distribution of pharmaceuticals from the manufacturer to their final destination.  Three milestone healthcare and logistics events announced last week forecast a seismic shift that may profoundly change how healthcare products are administered to patients.  

The first milestone is the news report that Amazon is entering the air freight business with their lease of up to 20 Boeing 767 jets to be put into service beginning next month.  The second item concerns the announcement that healthcare company Kaiser Permanente is opening a medical school that will accept students beginning in 2019.  The third incident involves Valeant Pharmaceutical and their deal to provide discounted prescription and over-the-counter products to Walgreens on a consignment basis.

What do cargo jet leases, a new medical school and consignment sales agreements have in common?  They each bypass a vital link in the supply chain.  And that is the key to a pending re-shaping of the life sciences managed services industry.

Amazon is increasingly frustrated with the inability of major delivery companies to ramp up capacity to meet the increase in e-commerce demand, according to reports.  Express delivery services have run into problems the past few years maintaining on-time delivery during busy holiday shipping seasons.  If the experiment proves successful, then Amazon may conceivably expand the service beyond their own business and ship for other companies.  Amazon's business model is built around charging third parties for the convenience of utilizing Amazon technology and services, so this scenario may seriously disrupt the established express package delivery business.

Kaiser Permanente is a health insurance company operating in California, Colorado and several other states.   Although health care providers including the Mayo Clinic run medical schools, as a health insurer, Kaiser as a medical school operator eliminates the arms-length relationship between health insurers and physicians which may create the appearance of compromising patient care. 

Finally, Valeant Pharmaceutical reached an agreement with Walgreens last week to provide reduced-priced prescription dermatological, ophthalmological and some over-the-counter products to the drug store chain.   Valeant CEO Michael Pearson told CNBC last Tuesday that the discounts were made possible by cutting around the traditional distribution system for drugs.

Progress involves change and change demands a willingness to disrupt the status quo.  At WDSrx, we actively pursue ideas that foster our future competitiveness.  Last week’s developments should be carefully examined to measure their benefits and drawbacks for end consumers and patients.