Reform should hit pharmacy benefit managers hard

If reform passes, or even if the sentiments around reform remain in the air, pharmacy-benefit managers may take something of a financial beating in coming months, according to an analysis in The Wall Street Journal.

Right now, pharmacy benefit firms like Medco Health Solutions and Express Scripts earn billions moving drugs between drugstores, manufacturers and healthcare providers. Now, however, the Senate is encouraging such companies to be more transparent in how they operate, something they haven't been good about in the past. These firms fear, perhaps rightly, that exposing their secret sauce (pricing deals with pharma) could take away their competitive advantage.

Not only that, some companies are beginning to wonder whether the profits pharmacy benefit managers make are worth their middleman services. For example, Walgreen and Caterpillar recently agreed to negotiate directly for employee drug prices, rather than using a PBM.

To learn more about this trend:
- read this Kaiser Health News piece [1]

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PBM study critical of role played by benefits managers [2]
Healthcare M&A likely to be first private equity sector to recover [3]