The Evolving PBM Market

After completing our 2011 PBM Market Overview we took a look at some of the major, and not so major, activities of the past year to identify how the companies are positioning themselves.

Aetna and CVS Caremark entered into a 12-year contract to provide Pharmacy Benefit Management (PBM) services that will further enhance value and service for Aetna’s customers and members. Aetna will retain its PBM and manage clinical programs, protocols and oversight of its pharmacy benefits business. CVS Caremark will serve approximately 9.7 million Aetna PBM members and administer approximately $9.5 billion in annual drug spend.

Argus Health Systems announced an arrangement with Walmart to provide expanded network services. This Preferred Network approach coordinates efforts by Argus and Walmart to provide the lowest prescription benefit cost to Argus customers.

Former Caremark Rx executive Drew Crawford has been appointed president and CEO of Benecard PBF, an administrator of prescription benefits and services to public and private plan sponsors. BeneCard PBF also announced the appointments of Robert A. Cascarano and Sidney W. Stolz to the senior management team at BeneCard PBF indicating the company’s commitment to build the premier prescription benefits manager.

Catalyst Rx entered into a definitive agreement to acquire Walgreens Health Initiatives. With the addition of WHI, Catalyst’s PBM membership will increase from approximately 7 million individuals to over 18 million members, while annual prescription volume will expand from approximately 80 million to over 165 million. Catalyst Rx’s recent acquisitions also included:
- FutureScripts was the PBM subsidiary of Independence Blue Cross. FutureScripts provides pharmacy benefit management services to approximately 1 million lives and manages over 14 million prescriptions annually.
- inPharmative, Inc., a provider of rebate administration technology tools to PBMs, health plans, state Medicaid programs and group purchasing organizations.
- Total Script, LLC, and a pharmacy benefit management company with a strategic focus on the small- to mid-sized employer group markets.

CVS Caremark has been awarded a three-year contract (previously held by Medco Health Solutions) to provide integrated pharmacy benefit services for the Blue Cross and Blue Shield Government-wide Service Benefit Plan, also known as the Federal Employee Program (FEP), based on the best overall value. The Company will continue to provide FEP’s clinical programs and retail pharmacy benefit management services and also provide mail order pharmacy services and specialty pharmacy services to FEP’s more than 5 million federal employees, retirees and dependents.

Express Scripts announced an acquisition of Medco Health Solutions, for $29.1 billion, becoming the biggest pharmacy benefits manager in the country in one of the largest deals of the year. After the deal closes, Express Scripts will own 59 percent of the combined company. George Paz, the chairman and chief executive of Express Scripts, will continue to hold those titles. The board of the new company will be expanded to include two of Medco’s independent directors.

The Premier healthcare alliance has partnered with MedImpact to co-develop a program that helps hospitals and their benefit plan participants better manage the costs and quality of prescription drugs while delivering exceptional service.

UnitedHealth Group recently announced that the company’s health services businesses will unify their market presence under the master brand Optum™. OptumRx – previously Prescription Solutions – is a leader in the delivery, clinical management and affordability of prescription medications and consumer health products serving 13.5 million members.

Medco Health Solutions disclosed that after several months of discussions, its pharmacy benefit services agreement with UnitedHealthcare would not be renewed. Medco said it will continue serving UnitedHealthcare clients through the expiration of the current agreement on Dec. 31, 2012.

PerformRx was awarded a four-year contract to provide full pharmacy benefit management services to CalOptima, the second-largest health insurer in Orange County, CA.

RxUSApbm Inc. is one of America’s newest PBMs, serving small / medium and large size Independent Group Management contracts seeking maintenance medication for their members with Service and Savings.

SXC completed two acquisitions:
- PTRx utilizes a fully integrated approach to pharmacy benefit management by proactively engaging and working with the patient and their physician. This integrated approach to determining the most effective drug therapy for the lowest possible cost allows it to successfully control and manage pharmacy costs.
- MedMetrics Health Partners is one of the nation’s first and foremost non-profit pharmacy benefits management (PBM) organizations. MedMetrics brings to the marketplace full-service PBM support coupled with a highly unique combination of academically-driven, evidence-based clinical programming and a unique, 100 percent transparent , pass-through business model.

Additional information available