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Market channel developments:

  • PBMs seek to duplicate Medicare Part D success in the evolving healthcare reform marketplace
  • Increased focus on the management of complex patient types and biotherapeutics
  • Seeking to expand benefit management capabilities beyond pharmacy



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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 in July '15 if the deal is approved

RightSource Humana will be part of Aetna through Aetna's acquisition of Humana for $37 billion in July '15 if the deal is approved


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Please find below over 40 pharmacy benefit management (PBM) companies...
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.
In 2013 Costco entered the PBM market by launching its own PBM, Costco Health Solutions (CHS). Costco operates more than 470 stores in the United States.  

Their PBM has a unique business model. It focuses on businesses with less than 20,000 employees located within a certain proximity of their stores. CHS has a complete pharmacy network comprised of 64,000 pharmacies including national drugstore chains and other retail pharmacies to provide wide access. They also have mail order and specialty pharmacy services. 

The Costco PBM model passes on rebates to clients and has very competitively priced prescriptions for consumers to take advantage of.  It has several attributes to position itself based on stores and its membership business model:

  • Costco continues to expand the number of stores it operates, giving it a greater profile in the marketplace and more access to consumers  
  • With mail order and specialty pharmacy capabilities plus a national network of retail pharmacies, CHS widens its appeal to employers and is able to support their employees who may not live in a community with a Costco store.  
  • Costco stores have a solid healthcare offering, in addition to pharmacies, they have vision and hearing aid clinics within the stores augmented with a substantial selection of OTC and other consumer healthcare products
  • Costco can utilize the PBM to build its brand through drawing in more consumers to become members and sell additional healthcare and non-healthcare merchandise to them.  
  • Their focus on local businesses located reasonably close to a Costco store enables them to sharpen a marketing strategy aligned with specific metropolitan marketplaces coupled with national capabilities to accommodate additional customer needs.
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:

  • Catamaran is acquired by United Healthcare in 2015
  • Through the acquistion of Cigna, Tel-Drug becomes part of Anthem, 2015???
  • Through the acquisition of Humana, FutureSource became part of Aetna???
  • 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.
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