Topic > Megadeal Unites Drug Rivals - 959

Anna Wilde Mathews and Jonathan Rockoff are the authors of Megadeal Unites Drug Rivals in an article published on WSJ.com dated July 22, 2011. The article addresses the merger of two pharmaceutical benefit companies , Express Scripts Inc. and Medco Health Solutions Inc., along with the implications of the merger on the healthcare industry. This strategic merger is expected to impact the pharmacy benefit manager (PBM) market as well as impact drug costs and channels and possibly raise antitrust concerns. Key players in this article include merging PBM companies Express Scripts Inc. and Medco Health Solutions Inc. Their competing PBM companies include UnitedHealth Group Inc. with its OptumRx pharmacy unit, Walgreen Co. and CVS Caremark Corp. These PBM companies compete with each other for contracts with employers and health plans.Thomas Gryta defines Pharmacy Benefit Managers as companies that "process prescriptions for groups that pay for the drugs, usually insurance companies or corporations, and use their size to negotiate with drug manufacturers and pharmacies". (2011) Pharmacy Benefit Managers act as a link between payer companies and healthcare system variables. Their revenue comes from fees for prescription processing services, operating mail-order pharmacies and negotiating cost reductions with pharmaceutical companies. This consolidation, along with others in the healthcare services industry, drives a push to reduce costs and therefore increase revenues. By combining purchasing power and control over a large percentage of the pharmaceutical industry, PBMs can negotiate drug cost reductions for themselves and their consumers. They can source cheaper generic drugs from generic manufacturers, negotiate discounts and disco...... middle of paper... benefits to the industry. Works Cited Gryta, T., (2011, July 21). What is a “Pharmacy Benefits Manager”? Retrieved from http://online.wsj.com/article/SB10001424053111903554904576460322664055328.html#mjDropdownKotler, P., & Keller, K. L. (2009). A framework for marketing management: integrated with PharmaSim. Upper Saddle River, NJ: Pearson Prentice Hall.Mathews, A., & Rockoff, J., (2011, July 22). Megadeal unites drug rivals. Retrieved from http://online.wsj.com/article/SB10001424053111903554904576459924273283808.html National Association of Community Pharmacists (2011). Pharmacists: Proposed Express Scripts-Medco merger would reduce competition and increase health care costs. Alexandria, Virginia: Author. Retrieved from http://www.ncpanet.org/index.php/news-releases/1053-pharmacists-proposed-express-scripts-medco-merger-would-reduce-competition-and-raise-health-care-costs