Where oh where did all little pills go, where oh where could they be?

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Interesting. CVS and Walgreens kept coming up as top distributors - that can’t be right, can it? Do they distribute?

Yes, CVS actually pioneered the practice of operating its own distribution system (there's actual laws with respect to wholesale acquisition of goods versus retail), and for a while, ran a scheme where the distributors always lost money as a business entity.

Walgreens until Walmart upped their game in pharmacy in the mid-00s had the most efficient distributor and supply chain management system due to hiring people from UPS who are world-class excellent at that sort of business problem, though when Walmart decided to get good about SCM for drugs, they won. Walgreens still prefers ordering from the internal distributor when practicable and are graded on that as a metric. But what got Walgreens busted in Miami was that the distribution chief there really was on the take and was selling both outrageous quantities to the stores, but what got them under DEA scrutiny was a bunch of shady transactions that got registered with those third-party distributors when the company was only supposed to be a distributor for their stores.

If I remember correctly, CVS actually went through the effort of becoming its own manufacturer and still technically keeps the Department of Commerce multinational and the FDA filings for being a pharmaceutical manufacturer as they actually had the ambition to manufacture their own generics and basically play that game with their Caremark acquisition, but DoJ Antitrust warned them against it as well as product liability being bigger than the company was worth if they went too cheap with Indian and Chinese meds. This was the same time as the melamine contamination of Chinese milk.
 
So when I worked at CVS all our controls came from Cardinal. Are there CVS’ that there controls from CVS?

It depends on how the state is organized, it is quite possible that they came from CVS but stored and delivered at Cardinal (Both Walgreens and Walmart do it that way for certain drugs). For the way that the "I am the distributor but I store elsewhere", McK, ABC, and Cardinal have deals with each of the Big Pharmacies that a pharmacy company can buy some massive lot run from a manufacturer, but instead of storing it in their warehouses, they hire McK to hold it for them and send when it's time. So, when you're buying from Cardinal, you're "paying" Cardinal like $5 a bottle, then Cardinal turns around and buys from CVS Distributors for $4.50 a bottle, keeping $0.50 for the storage and transport. What physically happens though is that Mallinckrodt transports a bottle of Hydrocodone/APAP 5 to Cardinal and then Cardinal transports to your pharmacy. What finacially happens is that Mallinckrodt sells to CVS Distributors, CVS Distributors either hires their own trucks or hires Cardinal to transport from Mallinckrodt to the staging point (this is called carriage), the staging point has a fixed cost of rent which either is CVS itself or Cardinal (in your case, Cardinal), and then when CVS Pharmacy buys from CVS Distributor's stock of that drug, Cardinal handles the transaction for a fee.

The other issue is that some pharmacies have to register as "distributors" over the 5% rule, which quite a number of FL pharmacies had done.

You can just think of the massive ways you can game that system to screw over insurance companies. In fact, they all do so (remember the repackaging NDC cost shifts)? That was McK's idea widely copied by everyone.

Aside question, did Brushwood, Hartzema, or Hepler teach any of this to you all? They certainly know what was going on, but whether they were on autopilot or not is a whole different story.
 
I have literally never heard of any of this, although I could easily have slept through it in the intro to healthcare system class from first year. 😉

I doubt it, I'm pretty sure that the above three were either disengaged (or in the case of one of them, more interested in other pursuits) most of the business details are entertaining enough that you probably would have remained awake. The one who taught me had all these sorts of stories (including his own from when how he got to Medco and ran the place one step ahead of the Feds). It's pretty depressing though that there was a time where you could actually learn this (like there was a time where it wasn't odd for someone to go straight into a hospital and work from licensing or compound worth a damn).

But yeah, that Amazon model of using the Amazon Warehouse for third party goods, that's not a new idea, it's just the first time it was that obviously consumer facing. Most businesses with arbitrage (wholesaler in plain English) potential have these sorts of relationships for accounting purposes. Almost everyone in the Supply Chain Management field differentiates between physical movement of goods and financial movement of currency (and if you want to know why Walgreens is run the way it is now, you should figure out how WBA's tax structure works).
 
Cvs in bullhead city arizona looks like the top cvs in the pain pills. Any one know if this is a high volume 24/7 pharmacy or caremark mail order?
 
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