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Pharmacy Benefit Management / PBM Trends​

  • Increased focus on complex patient types, biotherapies
  • Seeking to further integrate within the medical treatment continuun of care, HEOR and cost-effective outcomes 
  • "Captive" or integrated PBMs owned by MCOs are growing in size and re-setting the PBM marketplace



The PBM ("pharmacy benefit manager" or "prescription benefit manager") sector continues to be a sector 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.

In March, '15 United Healthcare acquired Catamaran for $12.8 billion and merged them with their OptumRx PBM business unit

Tel-Drug / Cigna will be part of Anthem through Anthem's acquisition of Cigna for $54 billion if the deal is approved.

RightSource Humana will be part of Aetna through Aetna's acquisition of Humana for $37 billion if the deal is approved.


A list of PBMs; scroll down page for presentations and PBM market sector trends...
Click on the link below to find out how employers, insurance carriers, managed care organizations and PBMs are affected by specialty pharmacy benefit management:
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While the Express Scripts/Medco merger was substantial, a series of acquisitions over the course of several years enabled SXC Health Solutions to grow exponentially and rebrand 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:

  • 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 along the way. Through its PBM vendor deals with RegenceRx (a BCBS entity) and Cigna, the company had successfully extended its reach into the Blues and commercial managed care marketplaces. 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 provides them with more growth options.
Collectively, the pharmacy benefits segment continues to be a healthcare industry change agent with ongoing, pivotal deals between the leading managed care companies, PBMs and retailers:

  • EnvisionRx (a unit of Rite Aid) becomes part of Walgreens / Boots if the acquisition of Rite Aid is approved in 2016 or perhaps 2017
  • Through the acquisition of Cigna (if approved), Tel-Drug becomes part of Anthem, maybe in 2016??
  • Through the acquisition of Humana (if approved), FutureSource becomes part of Aetna, maybe in 2016??
  • Catamaran is acquired by United Healthcare in 2015
  • RegenceRx deal outsources its PBM program to Catamaran, 2013
  • Costco launches its own PBM program, 2013
  • United HealthCare "insources" its PBM services away from Medco, 2013
  • Cigna deal outsources its PBM program to Catamaran, 2012
  • Walgreen Co. sells its PBM unit to CatalystRx, 2011
  • Aetna deal outsources its PBM to CVS Caremark, 2010
  • WellPoint sells its PBM unit to Express Scripts, 2009

While they are billed separately, pharmacy benefits have a direct impact on the care and cost performance of medical benefits. This is even more pronounced when considered in Medicare and specialty pharmacy patient populations. PBMs continue to innovate and drive care and cost performance for patients, payers and providers. The growth of the Anthem and OptumRx PBM units is a significant development in the sector as employer groups will be placing more total plan spend with them; retail pharmacy and independent PBMs will be adjusting their strategies accordingly.
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.



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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 and other stakeholders.  It is increasingly regulated as well.  Healthcare reform, ongoing mergers / acquisitions and cost control measures are pivotal contributors to the changing nature of this market sector and the business models within it. Pharmaceutical / healthcare product manufacturers, healthcare data / software companies and other entities need to account for the unique attributes of this healthcare business segment; they can be market access opportunities or obstacles.