pharmacy benefit management industry
Healthcare Medical Pharmaceutical Directory.com
Pharmacy Benefit Managers - PBMs

Market Trends​
  • Increased focus on complex patients, biotherapies; seeking to further integrate within the medical treatment continuum of care
  • "Captive" or integrated PBMs owned by MCOs are re-setting the PBM marketplace

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The PBM ("pharmacy benefit manager" or "prescription benefit manager") sector continues to be active with mergers and acquisitions.  EnvisionRx, the PBM unit of Rite Aid, will become a unit of Walgreens if the acquisition is approved.  Walgreens and Rite Aid are in the process of offloading over 800 stores to Fred's Pharmacy to satisfy antitrust concerns.

Two mergers involving sizable internal PBMs have encountered rough ground with deals being called off or in deep jeopardy of dissolving.  As of February 11, 2017, the Aetna / Humana merger has fallen through; Aetna owes Humana a $1 billion breakup fee.  As of February 15, 2017, Anthem is suing Cigna as Cigna wishes to terminate their deal and collect a $1.85 billion break up fee from Anthem...

While the Express Scripts march of acquisitions culminating into its buyout of Medco was substantial, a series of acquisitions over the course of several years enabled SXC Health Solutions to also grow exponentially and re-brand itself as "Catamaran". Originally a company focused on claims processing technology used throughout the PBM industry, SXC began building its own PBM unit through executing a series of deals which ramped up considerably over 5 years and eventually led to SXC being acquired itself:

  • Restat, a PBM, in 2013
  • HealthTrans, a discount card program/PBM services provider, 2012
  • Catalyst Health Solutions, a PBM, 2012 (rebranded company as "Catamaran")
  • MedMetrics Health Partners, a PBM, 2011
  • PtRx, a PBM/specialty pharmacy, 2011
  • MedfusionRx, a specialty pharmacy unit, 2010
  • National Medical Health Card Systems, a PBM/specialty pharmacy, 2008

With its healthcare IT attributes as a base, the company invested in itself with PBM administration, mail order and specialty pharmacy capabilities --adding more covered lives and infrastructure with each acquisition. United Healthcare acquired Catamaran in early 2015 for $12.8 billion and combined it with their Optum PBM business unit. UHC has substantially deeper PBM capabilities and market reach as a result.

Prime Therapeutics is a unique organization among PBMs and healthcare organizations. It operates as a PBM partnership amoung 14 BlueCross BlueShield plans. Initially starting as the pharmacy unit of BCBS Minnesota, it has collected additional stakeholders with the latest one being BCBS North Carolina.  

The participating entities are BCBS of...

  • Alabama
  • Florida
  • Illinois
  • Kansas
  • Minnesota
  • Montana
  • Nebraska
  • New Mexico
  • North Carolina
  • North Dakota
  • Oklahoma
  • Texas
  • Wyoming


By the plans owning Prime Therapeutics, they get direct care/cost insights and integrated prescription plan administration they may not realize through a PBM separate from their organizations. This includes operating two of its own mail order pharmacies and a specialty pharmacy unit. Prime Therapeutics is able to apply leverage when dealing with retail pharmacy providers, pharmaceutical manufacturers (brand and generic) and other vendors. The business model is flexible as it works with customers from their respective BCBS stakeholders as well as accounts who are not BCBS plan accounts.  

Their new strategic alliance with Walgreens (AllianceRx Walgreens Prime) has the makings of a supreme PBM business model with integrated clinical, financial, formulary, retail, mail order and specialty pharmacy attributes. In August, '16 Walgreens Boots Alliance WBA announced it was partnering with pharmacy benefit manager Prime Therapeutics to reduce drug procurement costs. The companies will combine central specialty pharmacy and mail order service units and introduce a new retail pharmacy network; the new organization, known as "AllianceRx Walgreens Prime" launched in early April, '17.

Specialty pharmacies provide drugs to people with costly, chronic conditions such as rheumatoid arthritis. Walgreens has four central specialty pharmacies that primarily provide mail order services; they will augment the specialty pharmacy capabilities of Prime Therapeutics. The combined entity will be owned by Walgreens and Prime Therapeutics, but will have a separate board and executive team. 

Prime Therapeutics has been growing substantially on the member / customer side as well. Prime Therapeutics will provide the specialty pharmacy benefit management to the Federal Employee Program which added 5.4 million members. They also landed the Regence BCBS pharmacy business which covers members from four states: Idaho, Oregon, Utah and Washington. In 2016 they added 300,000 BCBS of Rhode Island members.

Costco's PBM, Costco Health Services, features retail, mail order and specialty pharmacy services. Its business model is focused on employers within a certain proximity of its stores. One of the primary goals of the PBM is to drive membership for the stores and with its conventional retail pharmacy network, it is able to service members of the local employers across the United States. In addition to cultivating more members, the PBM augments Costco's substantial health & beauty, hearing aid and vision store units.

CVS Health bulked up its PBM capabilities by acquiring Omnicare, the leading provider of pharmacy services to long term care facilities, in May, 2015. Omnicare has about 13,000 employees, 160 locations in 47 states across the nation. With the acquisition of Omnicare, CVS Health greatly expands its prescription business in assisted living, long term care and specialty pharmacy. Given the aging U.S. population, long term care is a growth segment of the health care system. More persons are expected to use assisted living facilities and independent living communities in coming years, creating a large growth opportunity for companies serving the health care needs of seniors.




A list of Pharmacy Benefit Managers; scroll down for healthcare marketing strategy presentations and PBM market sector trends...
PBM marketing strategies
The PBM sector is complex, competitive and continues to evolve. It's a blend of healthcare benefits, MCOs, commercial insurance carriers, clinical services, payers, consumers, employers, employee benefit consultants, prescribers, retail, mail order and specialty pharmacies and other stakeholders. The sector is increasingly regulated as well. Healthcare reform, ongoing mergers / acquisitions and cost control measures are pivotal contributors to the changing nature of the PBM market and the business models within it.

Niche pharmaceutical products and orphan drugs have been on the radar screens of consumers, patient, clinicians, PBMs and healthcare / pharmacy benefit plan stakeholders recently.  These products play important roles in the treatment of rare diseases and conditions.  While there are not many patients requiring these products, costs tend to run high for them as they are very specialized and required a great deal of research and development to be brought to market.  Another challenge is since the patient count is low, there are less opportunities for pharmaceutical manufacturers to achieve ROI.  

The distinct need for the products is clear coupled with high treatment costs are a combined issue.  PBMs are tasked with managing the benefit plans through which the products are covered.  Prior authorizations are part of the rigor for patients and clinicians. Patients, employers and other plan sponsors are challenged by the costs involved.  Pharmaceutical manufacturers are seeking to widen revenue streams by developing novel therapies but face headwinds when it comes to profitably pricing and promoting them in the marketplace.
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