Pharmacy Benefit Management- What You Should Kno · ‒CVS to acquire Aetna ‒Prime Therapeutics...

9/12/2018

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Pharmacy Benefit Management-What You Should KnowTina Rydland, PharmDManaging DirectorArdentCare Solutions

September 20, 2018

Nice to Be Home!

Learning outcomes

Care managers, claims managers and others will have a high level understanding PBM contracting and understand their role as liaisons/advocates in coordinating care with vendors to support members & clients

Objectives

• Understand core role of a Pharmacy Benefit Manager (PBM)

• Learn about current state of affairs

• Understand how two main PBM contract types work and impact the Plan

• Speak to myths regarding ways to contract and manage PBM program

• Obtain a few tips on how to gain control of the PBM contract(s)

• Explore how medical management might help pharmacy leaders to address new challenges in pharmacy

• Wind down with food for thought- is your pharmacy program up to snuff?

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WHAT IS A PBM?

Pharmacy Benefit Managers (PBMs) administer prescriptiondrug plans for more than 266 million Americans who havehealth insurance from a variety of sponsors including:commercial health plans, self-insured employer plans, unionplans, Medicare Part D plans, the Federal Employees HealthBenefits Program (FEHBP), state government employee plans,managed Medicaid plans, and others.

Source: Pharmaceutical Care Management Association (PCMA) https://www.pcmanet.org/our-industry/. PCMA is PBM trade organization

WHAT DO PBMS DO?

• PBMs reduce drug costs by: Offering Amazon-style home delivery of medications and creating select

networks of more affordable pharmacies; Encouraging the use of generics and more affordable brand

medications; Negotiating rebates from drug manufacturers and discounts from

drugstores; Managing high-cost specialty medications; and Reducing waste and improving adherence

Source: Pharmaceutical Care Management Association (PCMA) https://www.pcmanet.org/our-industry/

Over $400 Billion Prescription Drug Industry

PBM Current State of Affairs

Treacherous As

Paddle Boarding

Racing

in Colorado

https://www.pcmanet.org/our-industry/

https://www.pcmanet.org/our-industry/

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CVS Health Website

Express Scripts Website

“Finally, we used our cash flow to return $6.4

billion to shareholders through share repurchases

and dividends in 2017.” http://investors.cvshealth.com/2017-

in-review/ceo-shareholder-letterOptumRx, United Health Group WebsiteIn 2017, OptumRx revenues increased 5.5 % to $63.8 billion year over year. OptumRx fulfilled 1.3 billion adjusted scripts in 2017. https://www.unitedhealthgroup.com/content/dam/UHG/PDF/investors/2017/UNH-Q4-2017-Release.pdf

KEY POINT: BIG 4 PBMS DOMINATE, 286 MILLION MEMBERS

We’ve grown to serve 22 Blue Plans and more than 27 million members

Key Point: Big PBMs Dominate Rx Revenue,$228 B

See appendix for M&A History of PBMs

Thanks to Drug Channels Institute andAdam Fein for permission to use this chart.Source: The 2017 Economic Report on U.S.Pharmacies and Pharmacy BenefitManagers. Drug Channels.net

Continued ConsolidationMonitor Drug Prices

Significant Business Deals: 2017/2018‒CVS to acquire Aetna‒Prime Therapeutics 10-yr partnership w/ Walgreens‒Cigna acquires Express Scripts PBM ‒Albertsons trying to buy > 2,000 Rite Aid stores‒Walgreen Boots Alliance purchased >2000 Rite Aid stores‒Walmart acquires Humana‒Diplomat specialty pharmacy purchased small PBMs (LDI,NPS)‒Amazon’s acquires PillPack

Current State of Affairs

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Strip Packs- Simplify Medication Process

• Capture complete medication list • Synchronize refills• Packages medications in strip packs

by dose, e.g., AM, noon, evening, bedtime

• Pharmacy works closely w/ doctor• Medications subject to dosage

adjustments filled in vials• Strips delivered- usually monthly

Concentrated MarketMonitor Drug Prices

• Top three PBMs, pharmaceutical wholesalers, & retailers account for 85%, 66% and 49% of their markets, respectively1

• Top 4 specialty pharmacies owned/co-owned by a PBM ; accounted for ~ two-thirds specialty prescription revenues, 2017

2

• Owners: CVS Health, Express Scripts, Walgreens Boots Alliance (Alliance w Prime Therapeutics PBM), OptumRx


1Source: USC Schaeffer Center, June 2017 BY NEERAJ SOOD; HTTP://EVIDENCEBASE.USC.EDU/FOLLOW-THE-MONEY-THE-FLOW-OF-FUNDS-IN-THE-

PHARMACEUTICAL-DISTRIBUTION-SYSTEM/12015 Market share by number of prescriptions for PBMs, by revenue for retailers

12014 Market share by revenue for wholesalers2

Source: https://www.drugchannels.net/2018/03/the-top-15-specialty-pharmacies-of-2017.html

Traditional Contract: Rx Reimbursement ModelPBM Largely Controls Flow of Dollars

Plan Sponsors gain control by using a pass-through, transparent contract

PBM retains undisclosed $ from transactions- passes % to plan sponsor.

Big PBM owned pharmacies= >50% of revenue; 2/3rds of specialty pharmacy revevnue

Tina Rydland added Circles to demonstrate a point and green arrow from pharmacy to PBM

Thanks to Drug Channels Institute, Adam Fein for permission to use chart.

https://www.facebook.com/SchaefferCenter/

http://evidencebase.usc.edu/author/neerajsood/

http://evidencebase.usc.edu/follow-the-money-the-flow-of-funds-in-the-pharmaceutical-distribution-system/

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Is Your Plan Paying Too Much?

Understand How PBM’s Work

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Key Point: Two Main PBM Contract Models

PBM Knowledge

Pass-through

Contract

Transparent

Plan pays PBM an administration fee

Gaining popularity

Traditional

Contract

Less Transparent

Plan pays zero/ reduced admin. fee AND PBM

retains % of $ from claims utilization

Most common; under fire for NOT passing

along savings to patients, tax payers

Know How Your PBM

Gets Paid and By How Much

23% Not Sure How PBM Gets PaidRisk of Overpaying

Source: 2016 PBMI Research Report

Wowzer! Respondents declared responsibility for organization’s prescription drug benefit

PBM Knowledge

Key Point: Pass–Through PBM Contract -Fully Transparent

PBM Knowledge

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Key Point: Traditional PBM Contract- Less Transparent

PBM Knowledge

Spread Pricing (Traditional Contract)1. Spread pricing on a prescription claims

• PBM bills insurer $100 for Rx

• PBM pays pharmacy $90 (certain %)

• PBM retains $10 (difference)

2. Spread on manufacturer revenue

• PBM receives $4 (e.g., % of wholesale cost) per rebated drug

• PBM passes zero or a percentage of $4 to Plan Sponsor

• PBM retains $4 or the difference

3. Pharmacy network fees

• PBM charges pharmacies to participate in network

4. PBM-owned pharmacies (retail, mail or specialty)

• PBM receives purchase discounts from wholesalers / mfrs.

• PBM charges Plans Sponsor non-discounted cost of drug

• PBM retains discount amount

Key Point: Alternatively, a True Pass-Through PBM Contract passes through to Plan Sponsor ALL achievable discounts and savings

Traditional PBM Contract- Less TransparentMisalignment Between PBM and Plan Sponsor

$$$$ PBM Revenue from

Pharmaceutical Company & Pharmacy network and owned

pharmacies

$

PBM Revenue from Plan Sponsor

(Administrative Fee)

PBM favors this

relationship to maintain

profit margins

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Misaligned PBM Contract Can Result in Plan Paying up to 30% Higher Drug Costs

Plan Sponsor’s Gross Drug Costs

Plan Sponsor’s Gross Drug Costs

Traditional Contract- Misaligned incentives, PBM favors mfr. and pharmacy relationships. Incentive to maintain profits by allowing coverage of higher cost drugs and higher utilization

Pass-through Contract- Aligned incentives, PBM does not profit from mfr. nor pharmacy relationships- results in use of lower cost drugs, lower utilization (aligned formulary and clinical programs)

Typical Consultant’s ReportEvaluating Claims Against Performance to Contractual Percentage Discount Guarantees

Useless Exercise if Plan

is Already Paying Too

Much! Grrr!

Achieve Lowest Net Drug Cost Model Optimize Formulary, Clinical Programs, Rebates in That Order

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Plans Switched to Pass-Through Contract, 2017Example of Savings Potential

Incumbent PBM

Pass-through PBM

Dru

g C

ost

s (p

er m

emb

er p

er m

on

th)

Gain Control

Claims Data: Prices Vary by Pharmacy

NDCPackage Size of NDC

Drug Name and Strength Pharmacy Chain NameCost Type

CodeAWP (List

Price)Ingredient

Costcost per unit

16714068303 1000SIMVASTATIN TAB 20MG 605 - NATIONAL ESN NETWOR MAC $442.80 $3.30 $0.04



16729000515 90SIMVASTATIN TAB 20MG GOOD NEIGHBOR PHCY PROVID MAC $441.15 $12.00 $0.13




16729000517 1000SIMVASTATIN TAB 20MG HY-VEE INC MAC $442.54 $12.00 $0.13

68180047902 90SIMVASTATIN TAB 20MG TARGET CORPORATION MAC $442.85 $24.00 $0.27

68180047902 90SIMVASTATIN TAB 20MG TARGET CORPORATION MAC $442.85 $24.00 $0.27

68180047902 90SIMVASTATIN TAB 20MG CVS PHARMACY MAC $442.85 $24.00 $0.27




68180047903 1000SIMVASTATIN TAB 20MG SUPERVALU PHARMACIES INC MAC $442.85 $14.99 $0.17





68382006710 1000SIMVASTATIN TAB 20MG GOOD NEIGHBOR PHCY PROVID MAC $442.80 $12.00 $0.13

This pharmacy uses higher cost generic drug and charges plan more for it (added a multiplier to the price)

Negotiated amount

Grocery chain Pharmacy

PBM’s National Pharmacy Network ($12.00)

PBM Contract Language Spells it OutPermits PBM to Receive and Retain Undisclosed Revenue

Disclosure-Manufacturer Fees. PBM or affiliates may hold contracts with pharmaceutical

companies relating to products covered under this Agreement. In connection with such

contracts, PBM or affiliates may have financial relationship with pharmaceutical companies

and may receive, retain fees or other compensation from pharmaceutical companies for services

rendered and property provided to pharmaceutical companies, including, without limitation,

administration fees that range between one percent (1%) and four percent (4%) of the

Wholesale Acquisition Cost (WAC) of the products dispensed across PBM’s book of business.

In addition, PBM or affiliates may receive concurrent or retrospective discounts from

pharmaceutical companies which are attributable to or based on products purchased by PBM

affiliated dispensing pharmacies. The term “Rebates” does include manufacturer

administration fees received by PBM that are attributable to utilization of Client’s Plan

Participants, but does not include compensation, and discounts associated with purchase price

of products, which belong exclusively to PBM or its affiliates.

Financial Relationship w/ Pharmaceutical

Companies

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2.14 Drug Classification. PBM shall use only one nationally

recognized source, currently Medi-Span Master Drug Database

(Medi-Span) indicators and their associated files, or, if needed due

to limitations within the one source, PBM may use indicators

provided by another nationally available services to determine the

classification of drugs (e.g., prescriptions, OTC, brands, generics,

single sources, multi-source) for purposes of this agreement.

PBM Contract Language Spell it OutPBM Maximizes Profit by Classifying Claims in Their Favor

Vague Classification Source

Specific, reproducible definition

PBM RFP ResponsesPBM Maximizes Profit by Classifying Claims in Their Favor

Vague Generic Definition

Key Point: Stop using BAD PBM Contracts

Remove profit making opportunities & incentives

Demand transparent pricing

Demand downward pressure on drug costs

PBM Knowledge

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Americans’ Top Priority- Lower Drug Prices

Priority for Health and Human Services “…Detach the Incentives…”

“The key is, can we detach the incentives of everybody inthis system from these artificial list prices? ... [Rebates]ferment this game we have of ‘if list price goes up, rebategoes up’ where everybody’s winning except the patientwho’s paying out of pocket,”

HHS Secretary Alex Azar

Priority for These Guys! Employers Plan to Remove Profit-Making Incentives

The CEOs -- Jeff Bezos, Warren Buffett and Jamie Dimon --plan to start an insurance company for their employees thatwould be “independent entity free from profit-makingincentives and constraints.“Source:

SEATTLE & OMAHA, Neb. & NEW YORK--(BUSINESS WIRE)--Amazon (NASDAQ: AMZN), Berkshire Hathaway (NYSE: BRK.A, BRK.B) and JPMorganChase (NYSE: JPM) announced June 20, 2018

https://www.businesswire.com/

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Gain Control of

PBM Contract

Serene aspen grove in Colorado

Control of PBM Contract & Pharmacy

Spend

1. Trusted Advisor

2. Challenge Status Quo

3. Expert Analytics

4. Seek Maximum Achievable Discount

5. Contract(s)

Align to Plan’s

Interests

6. Address New

Challenges

7. Food for Thought-Strategic Decisions

7- Steps to Gain Control Of PBM Contract

Use Trusted AdvisorKnowledgeable, Unbiased

• Questions to ask your PBM consultantDo you get paid by PBMs or PBM affiliates for placing business? Generalist or expert in pharmacy benefits?Describe analytic capabilities, know how- go beyond the % discount

evaluation?How do you account business tactics that taint financial evaluation?What PBMs do you usually invite to RFP?How is process to assist Plan in narrowing in on right vendor(s)- financial &

serves?What is your success rate in changing PBM contract language to “level the

playing field”? How do you monitor PBM performance?

Gain Control

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Able and Willing to Change PBM Contract(s)Possible Action Steps w/ Advisor

Gain Control

Good Contract:

• Ongoing Monitoring

• Costs by channel, claim types, guarantees

• Plan/benefit

• Clinical mgt.

• Pipeline

• Resolve problems as they arise (don’t wait for Audit)

Poor Contract AND “Stuck” in Contract

• Analyze claims data

• Use data as leverage w/ PBM to:

• Stop the “bleed” e.g., generic pricing, mail order

• Exercise early exit clause

• Modify formulary

Poor Contract AND Near End of Contract

Terms

• Get educated

• Evaluate costs, slice and dice data, plan/benefit set-up

• Identify opportunities

• Explore all options

• Seek new contract -aligned to Plan’s best interest

Gain Control

Myth Facts

Bigger PBMs are better Smaller PBMs compete on price, service, compliance

Carve-in PBM is the way to go

Carve-in contract offers less control, strings attached; change all or nothing

Group purchasing better than direct purchasing

Group purchasing could cost more AND may not be a good match; evaluation is needed

PBM utilization management programs maximize Plan savings

PBM programs may favor manufacturer financial relationships Vs. plan sponsor cost containment goals

Challenge the Status Quo“Myths Buster”

Gain Control

Myth Fact

Bundling PBM services(single contract) is better e.g., mail, specialty pharmacy , core services

Select individual programs based on best fit, e.g., price, local Vs. national, better clinical mgt.; Option to change one service w/o disrupting others

Monitor performance of claims to contractual percentage discount guarantees

Monitoring variance to % discount guarantees is flawed! List price minus % discount is not what you actually pay!

DIY PBM is undoable Caterpillar, other payors use PBM to administer core functions; then in-source or use partner to handle formulary, UM, pharmacy network, etc.,

Challenge the Status Quo“Myths Buster”

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Caterpillar’s Reported DIY

Success

Limit PBM Involvement In Formulary and

Clinical Management

https://www.beckershospitalreview.com/supply-chain/can-employers-lower-drug-spending-by-limiting-pbm-involvement-in-health-plans-4-thoughts.html

Gain Control

• Estimated quarter of drug spend was wasted

1. Drug Waste

• Eliminates risk of PBM tactics as source of high drug costs

• Promoted use of generics instead of costly brands• Hired its own pharmacists and physicians

2. Created Own Formulary and Pharmacy Network

• Use PBM as an administrator only

3. Uses PBM to Process Claims and get Rebates

• Saves $5 to $10 million/year on cholesterol-lowering drugs alone

4. Success

Claims processing * Member / provider call center

Retail network management services * Prior authorization services *

Enrollment, eligibility management Reporting/ analytics *

Benefit plan design, management Drug Utilization Review (DUR) –retrospective *

Formulary management/ P&T * Mail pharmacy *

Rebate administration * Specialty pharmacy *

Client services Website

Communications- members, physicians

Drug Utilization Review (DUR) –concurrent

DIY- *PBM Roles Commonly Out-Sourced and/or Managed by Plan Sponsor

Gain Control

Ensure Data is Complete, AccurateDisclose Business Tactics that Taint Evaluation

MonitorKey

Metrics

Pricing Analysis-

include value of formulary, UM

Data Validation-is it accurate?

Data Capture-transaction

level

Key Points: Conduct ongoing monitoring of claims, correct problems right away, don’t wait! Don’t relay on PBM to monitor for you.

Gain Control

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• Realize actual savings Vs. better percentage discount rates only

• PBMs continuously negotiate for better drug discounts

• Demand to receive ALL discounts as they are negotiated

• Manage contract to discount “floor” (maximum achievable discount)

• DON’T manage contract to discount “ceiling” rate , PBM will keep difference as revenue

Gain Control

Receive Maximum Achievable Discounts from PBM

PBM ContractingAlignment to Plan’s Best InterestsContracting best practices

Clear definition of claimsRight to claims data

(transaction level, clinical indicators)

Right to audit all agreements w/ pharm. mfr. & pharmacy

Right to evaluate financials against market

Gain Control

Favorable contract terms

Overall favorable contract language

Clinically appropriate, lowest-net-cost therapies

High service commitment

Accountable to CMS compliance

Medical Management+

Pharmacy Leaders

Address New Challenges in Pharmacy

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Common ThemesEmployers Concerns with PBM

• No integrated case management despite PBM is carve in with Medical Benefit

• Specialty pharmacy management

• Poor formulary management

• No leading edge savings programs

Source: employer surveys, health business group

Address New Challenges

Oversight/In-source Cost Containment Programs and Explore Technology

• UM Programs

• Timely, use all available literature (not cherry picking to favor mfr. agreements), protocols enforced

• Fill gaps in pharmacist expertise: e.g., oncology, rare diseases, infectious diseases, renal care, behavioral health

• Explore value of technology used by network providers

• Special drug packaging- Simplify medication process for individuals, poly-chronic

• Help individuals remain independent• Accurate dosing tools, e.g., pharmacokinetics,

pharmacogenetics, guidelines• Improve dosing and data- e.g., hospital, infusion centers


Medical ManagementUncover Patient Concerns with Pharmacy Benefit

Perceived value— access, cost, service, outcomes

Look for patterns- e.g., member forgoes pharmacy benefit card—paying cash at counter is cheaper

Identify waste with 90 day supply program- auto-refills (patient stockpiles)

Impact of excessive promotion of mail order, PBM owned pharmacies; choice, access to pharmacist


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High Cost Drug RegimensIs Current Approach Working?

• Ineffective, unsafe medication therapy is costly

• Clinical information is limited, rare disease!

Current solutions from PBM, specialty pharmacy, Plan• Prior authorization – fax, phone, portal• Claim editing, re-pricing• Medical, pharmacy benefit rebates • Site of care management (hospital → home

infusion)


Food for Thought

Rawah Lakes Colorado

Are Patients Making Informed Medication Decisions? Who’s Helping Them?

“We’ve created a multi trillion-dollar edifice for dispensing the medicalequivalent of lottery tickets – and have only the rudiments of a systemto prepare patients for the near certainty that those tickets will not win.Hope is not a plan, but hope is our plan.”

Dr. Atul Gawande in his book, Being Mortal

Food for thought

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“As efforts to transform America’s health care delivery systemcontinue, patients must be both informed and actively engaged indecisions concerning the medications that represent the bestchoices for them in preventing and controlling disease. Thesedecisions can best be made when the cultural needs and beliefs ofthe patient are considered and incorporated with the bestknowledge and recommendations of the PCMH team members,particularly prescribers, pharmacists, care managers, and others,who provide and are responsible for the patient’s medicationrelated care.”

Comprehensive Medication Managmenthttps://www.pcpcc.org/sites/default/files/resources/Appendix_A_Guidelines_for_the_Practice_and_Documentation.pdf

Are Patients Making Informed Medication Decisions?

Food for thought

• Comprehensive Medication Management (CMM) ensures: Appropriate use, administration of medicationMedication is effectiveMedication is not causing harmPatient can adhere to drug regimenWorks DIRECTLY w/ individuals (patient, care

giver) AND care teamContinuous care processExperts

• Does this process have a role in value-based contracting?

Source: https://www.pcpcc.org/guide/patient-health-through-medication-management

Food for thought

Are Patients Making Informed Medication Decisions? Is CMM Missing?

Maximize ValueHigh Cost Drug Regimens

Patient: Informed Decisions, Actively Engaged

Drug Selection Decisions

Appropriate Dose, regimen

(pharmacogenetics –kinetics; pt.

characteristics, guidelines)

Lowest Cost Procurement (e.g.,

PBM , Specialty Pharmacy, Direct,

Health System)

Site of Administration (experience?)

Appropriate preparation,

administration (experience?)

My EOB/Bill: accurate?,

unexpected?

Monitoring, follow up care

(value assessment)

Many Stakeholders, who’s doing what, who’s aligned to patient/plan interests?

• PBM & Pharmacy Benefit

• Medical Benefit

• Care Team/Prescriber

• Health Plan

• Health System

• Specialty pharmacy

• Case manager

• Pharmacist

• Pharmaceutical company

• Patient assistance program

• Care Giver

• Home Care

Food for thought

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• Plans have more options for purchasing PBM services (e.g., bundled, unbundled, pass-through,

traditional, health system-owned, health plan owned, pharmacy-owned…)

• Medications are specializing, landscape is changing (specialty, medical pharmacy)

• Is current pharmacy program up to snuff?

Is Pharmacy Program Up to Snuff? Competitive?

Food for thought

• Plan’s motivation, desires for pharmacy program?

• Where will pharmacy program compete , be it’s best?

• How will pharmacy program be it’s best? • Please customers, provide sustainable value?

• What does map of capabilities look like?• What systems are required to support

services, measure outcomes?

Food for thought

What Decisions Might Need to be Made?

Key Takeaways from Learning Objectives- whew!• Understand core role of a Pharmacy Benefit Manager (PBM)

• Focused on cost reduction, access, AND Plan should eliminate PBM profit making incentives

• Learn about current state of affairs • Big PBMs dominate in PBM market share and pharmacy dispensing revenues! Conflict of interests exist. Payor could be

paying up to 30% more d/t PBMs favoring manufacturer and pharmacy relationships to retain profit margins.

• Understand how two main PBM contract types work and impact the Plan• Traditional Vs. Pass-through; Seek transparent, pass through contract. Ensure pass-through is actually performing as a

pass-through; measure performance by drug cost pmpm accounting for the maximum achievable discounts Vs. % discounts off a list price or variance to discount rates (flawed method)

• Speak to myths regarding ways to contract and manage PBM program• Big PBMs are not always better!; Mid-tier/smaller PBMs compete on price/service; Don’t assume cooperatives, carve-in

pharmacy, bundled contract is better on price and fit Vs. separate evaluation of vendors based on plans individual needs/fit

• Obtain a few tips on how to gain control of the PBM contract(s)• Seek trusted, knowledgeable advisor - help achieve contract that’s in full alignment to Plan’s best interest

• Explore how medical management might help pharmacy leaders to - address new challenges in pharmacy

• Provide oversight and expertise-ensure cost containment programs work in Plans favor• Explore pharmacy technology to help patients and providers achieve best outcomes• Gather and share with Plan insights from patient engagements

• Wind down with food for thought- is your pharmacy program up to snuff? • Many stakeholders involved w/ patient’s high cost medication taking experience/ decisions. Who’s providing the most

value to patients and outcomes? How do we optimize their work? What decisions do Plans need to make to ensure pharmacy program is competitive in a more specialized pharmacy market place.

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Thank you

Contact Information:[email protected]

List of PBMs

PBM Model Website State

MedImpact Healthcare Systems PBM, independent, full service http://www.medimpact.com CA

MedOne Healthcare Systems PBM Pharmacy ownership/ Hartig http://www.medonehs.com Iowa

MedTrak Services PBM http://www.medtrakrx.com KS

MeridianRx PBM, transparent http://www.meridianrx.com MI

National Pharmaceutical Services Now owned by Diplomat Specialty Pharmacy http://www.pti-nps.com NE

National Script PBM http://www.nationalscript.com CO

Navitus PBM, Transparent/Pass-through http://www.navitus.com WI

Northwest Pharmacy Services PBM http://www.NWPSRX.com WA

OptumRx PBM, traditional, United Health Group company http://www.optum.com IL

PDMI (Pharmacy Data Management) PBA http://www.pdmi.com OH

PerformRx PBM, owned by AmeriHealth Caritas (Medicaid focus) http://www.performrx.com PA

Phoenix Benefits Management PBM, TPA focus http://www.phoenixpbm.com GA

Prime Therapeutics PBM, Health Plan Owned (BCBS Plans) http://www.primetherapeutics.com MN

ProAct PBM, pass through, Pharmacy Ownership (Kinney) http://www.proactrx.com NY

ProCare Rx PBM PBM, transparent http://www.procarerx.com GA

RxAdvance PBM, technology focus http://www.rxadvance.com MA

ScriptGuideRX, Inc. PBM, transparent http:/www.scriptguiderx.com MI

Serve You Custom Rx Management PBM, self-funded employer focus http://www.serve-you-rx.com WI

WellDyneRx PBM http://www.welldynerx.com FL

History of PBM Mergers and Acquisition ActivityKey Drug firm

Drug-maker era: Pharmaceutical firms acquire PBMs

1968 The first PBM, Pharmaceutical Card Systems (PCS), is started in Scottsdale, Arizona

1993 Merck purchases Medco for $6 billion

1994 Eli Lilly purchases PCS Health Systems for $4 billion

1994 SmithKline Beecham buys Diversified Pharmaceutical Services (from insurer UnitedHealth) for $2.3 billion

Independent era: Pharmaceutical firms sell PBMs as a result of 1990s FTC actions

1998 Eli Lilly sells PCS Health Systems for $1.5 billion

1999 SmithKline Beecham sells Diversified Pharmaceutical Services to Express Scriptsfor $700 million

2003 Merck spins off Medco

Pharmacy era: Mergers between PBMs, and of PBMs with pharmacy chains

2000 Advance Paradigm purchases PCS for $1 billion, and becomes AdvancePCS

2003 Caremark purchases AdvancePCS for $5.6 billion

2007 CVS Purchases Caremark for $26.5 billion

2012 Express Scripts merges w/ Medco for $29 billion; acquires Accredo speciality pharmacy , merges it with CuraScript

Feb. 2015Rite Aid purchases EnvisionRx for $2 billion. (owns subsidiary PBM, MedTrak, owns PBMs Connect Health Solutions, Smith Premier Services)

Mar-15 OptumRx purchases Catamaran for $12.8 billion (combines 3rd & 4th-largest PBMs)

May-15 CVS purchases Omnicare for $12.7 billion

Oct. 2015 Walgreens announces intention to acquire Rite Aid for $17.2 billion

mailto:[email protected]

https://www.pbmi.com/PBMI/Directory/Profile_Pages/PBM_Profile_Page.aspx?ID=152100

http://www.medimpact.com/


http://www.medonehs.com/


http://www.medtrakrx.com/


http://www.meridianrx.com/


http://www.pti-nps.com/


http://www.nationalscript.com/


http://www.navitus.com/


http://www.nwpsrx.com/


http://www.optum.com/


http://www.pdmi.com/


http://www.performrx.com/


http://www.phoenixpbm.com/


http://www.primetherapeutics.com/


http://www.proactrx.com/


http://www.procarerx.com/


http://www.rxadvance.com/


http://www.scriptguiderx.com/


http://www.serve-you-rx.com/


http://www.welldynerx.com/

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Big PBMs % Rx Claims, 2015

Source: Drug Channels

Real Examples: PBM RFP Remove Profit-Making Opportunities from PBM Contract

Pseudo-Pass-Through Agreement- sneaky!

Real Examples: PBM RFPRemove Profit-Making Opportunities from PBM Contract

Boo!

Pharmacy Benefit Management- What You Should Kno · ‒CVS to acquire Aetna ‒Prime Therapeutics...

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