May 20, 2016
Not every aspect of the shifting health care market is clear, but one thing is for certain: The importance of pharmacy benefit management companies (PBMs) is increasing. Drug prices are rising, and PBMs continue to act as intermediaries between insurance companies, pharmacies and manufacturers to reduce prices for insurers and patients whenever possible. PBMs have seen changes in recent years, similar to every other aspect of the health care industry, and the future holds even more advancements and alterations.
PBMs originally served as negotiators with manufacturers and pharmacies for lower drug costs. They would then pass on a portion of these savings to insurers, which then passed on some of the savings to patients. In addition to cost reduction, PBMs helped improve efficiency and maximize patient care.
In the most recent past, PBMs have become more technologically advanced, just in time to align their tech-savvy options with patients' consistent cell phone use. Last year, PBMs put out apps that could remind patients to refill or take their prescriptions. The purpose of these apps was to improve patient adherence to medication use.
Apps aren't the only area PBMs became more technologically friendly. More medical providers began using electronic scripts instead of traditional paper. Overall, a greater portion of the health care industry became Internet-based.
Competition among current PBMs is ongoing and robust. These businesses want to sign long-term contracts with large insurance companies to have more negotiation leverage with pharmacies and drug manufacturers. This competition has led to the consolidation of numerous PBMs or PBMs and pharmacies, such as Express Scripts acquiring Medco Health Solutions. Once SXC Health Solutions Corp. merged with Catalyst Health Solutions and formed Catamaran, it became one of the biggest portions of the PBM market. Catamaran and OptumRx then announced a merger, which was completed in July of this year.
Since the mergers, the current top five players in the PBM market to date are Catamaran, OptumRx, CVS Health, Express Scripts, and Prime Therapeutics, Medgadget reported.
The consolidation trend within the health care industry is likely to continue. As key PBM players grow in size, they'll be better able to acquire additional smaller entities that don't have enough negotiating power to survive or progress on their own. And it isn’t only the PBM marketplace that will see additional consolidation. Insurers and hospitals throughout the U.S. are merging, reducing the number of players in the field. For instance, five major insurance companies may became three this year as Anthem merges with Cigna and Aetna buys Humana – though both are waiting on federal regulatory approval.
As PBMs merge, the scope of these businesses - and of other organizations in the health care industry - will expand. Catamaran CEO Mark Thierer thinks the PBM industry will gain revenue through providing analytics about prescription drugs, effective medical care and compliance, Forbes reported. This is already coming to fruition as Catamaran gained OptumRx's data and analytics capabilities in the merger.
“Advanced Medical Reviews (AMR) has invested heavily in cutting-edge data and technology, including our patent-pending portal, which improves the entire process and workflow for all of the reviews we provide such as PBM reviews,” stated Vince Bianco, president of AMR. “As we look to help improve the quality of patient care, one of the ways we can contribute is to make sure our clients receive the quality and response times they are looking for.”
Another prediction is that more mail-order and brick-and-mortar pharmacies will stop competing and instead work together. For instance, Walgreens and OptumRx announced a new partnership in March that they say will lead to better pharmacy solutions and customer savings.
The exact changes for future PBMs await to be seen, but Medgadget predicted the PBM market to expand 7 percent between 2015 and 2019 and reach $4 trillion. Clearly, these businesses benefit the current health care market and will continue to find solutions to new needs.
Thanks for signing up!
Error with signing up -- can you try a different email?
By submitting this form, you are consenting to receive marketing emails from: Advanced Medical Reviews, LLC. You can revoke your consent to receive emails at any time by using the Unsubscribe link, found at the bottom of every email.