Hints and tips:
...The game for drugmakers is to get PBMs to put their drugs on these lists. The FTC says Amgen is skilled at bundling its drugs in its PBM negotiations....
...PBMs insist their practices have a deflationary effect on drug spending overall....
...“PBMs actually make more money when they pick a higher priced drug over a lower priced drug,” he said. “PBM profits are based on making a slice of the prescription drug pie more expensive.”...
...But others believe technology will disrupt the PBMs’ business models, so regulators do not have to....
...Targeting PBMs while going easy on drugmakers is not the answer. Last year, the two largest PBMs, CVS Caremark and Express Scripts, generated $10bn of combined operating income....
...Sanofi said it would lower the net price of Praluent for a significant proportion of patients covered by Express Scripts, the largest standalone pharmacy benefits manager (PBM) in the US....
...However, Mr Rea of Rx Savings said some drugmakers with expensive products would try to buy preferred slots on formularies — and thus keep their cheaper rivals off the lists — by offering larger rebates to PBMs...
...The three largest PBMs — CVS’s Caremark, Express Scripts and UnitedHealth’s Optum — together manage roughly 250m lives, according to Credit Suisse....
...Express Scripts, the largest standalone PBM, lost 3.2 per cent while CVS Health, the pharmacy group that operates the Caremark PBM, shed 4.1 per cent....
...Rite Aid has a small PBM unit as well. Overall, by buying cheaply and unlocking property values, Cerberus has probably done well on its grocery adventures....
...Anthem, the second largest health insurer, also entered the PBM sector recently by launching a new operator called IngenioRx....
...PBMs and insurers have also been accused of hanging on to a portion of the rebates to boost their profitability rather than passing the savings through to patients....
...Express Scripts was the last large independent pharmacy benefits manager, or PBM, which acts a middleman in negotiations between drugmakers and the payers — the employers, insurers, and government, which...
...“A new entrant like Amazon would put pressure on the pharmacies and the PBMs to do more with less.”...
...The PBM, wholesale and retail pharmacy industries are all highly concentrated, after decades of unchecked consolidation....
...PBMs act as middlemen between insurers and large employers. The company had previously indicated that it might not renew its contract with Express Scripts....
...CVS, in addition to its nearly 10,000 pharmacy stores, operates a pharmacy benefits management business (PBM) that negotiates prices for medicines with big pharma groups....
...The latest battle comes amid an increasingly rancorous relationship between PBMs and the pharmaceuticals industry....
...Analysts have also asked whether some of the health insurers who are customers of CVS’s PBM division, such as UnitedHealth, might take their business elsewhere if the company were to own a competitor outright...
...Express Scripts has been in a legal dispute over its contract with Anthem, one of the five large US health insurers, which claimed that the PBM had been overcharging it by billions of dollars....
...Dr Wolfe believes this incentivises PBMs to keep covering expensive branded drugs over cheaper generics....
...“Market access has been changed by bigger PBMs and bigger insurance companies having more leverage when they negotiate with suppliers,” he told reporters after announcing full-year results broadly in line...
...They also reckon that PBMs do not want to contend with the negative publicity of denying someone with a rare, quite often deadly condition a potentially life-saving drug....
...Together, the three pharmacy benefits managers, or PBMs, serve 215m US patients, meaning Philidor could not have continued to operate without their support....
...With an enterprise value of $70bn, the largest PBM today is Express Scripts, which bought Medco for $34bn in 2011. Express Scripts is a pure-play PBM....
International Edition