Fed appeals court ruling hurts PBMs

Shares of the big three pharmacy benefits management (PBM) companies--Medco, Express Scripts and Caremark--were all lower this morning after a federal appeals court upheld a Maine law that forces PBMs to reveal information about their business dealings with drug companies. PBMs receive rebates from drug companies for guaranteeing position of brand-name drugs on their formularies, and this practice has been very controversial. The law also requires PBMs to act in the best interest of their clients--rather than their own--when negotiating deals. Supporters of the Maine law say it will save consumers millions. PBMs believe that it will impact their ability to get the best price for their customers.

- see this article from The Wall Street Journal (sub. req.)

PLUS: Caremark's earnings yesterday showed a solid quarter in which the PBM's profits were in line with expectations while revenues were slightly lower than expected at $8.1 billion. Report