MemberHealth Makes a Move
This article was originally published in RPM Report
Three months in to Medicare Part D, the stand-alone drug insurance market is heavily concentrated. Not surprisingly, United has the biggest share. But one member of the top tier--MemberHealth--is an unlikely heavyweight.
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The merger of MemberHealth into Universal American is the biggest Part D deal so far-and the first of what is sure to be many ripple effects from the CVS/Caremark agreement. Universal's model relies on cross-selling in Medicare Advantage. The era of the stand-alone drug plan may be ending.
Medicare beneficiaries stuck with their Part D plans heading into 2007. That gives insurers more leverage in price negotiations with big pharma. It also means Part D may be more likely to stick around despite critics in the Democratic Congress.
Smaller PBMs are making bigger bets on the new Medicare drug market. Companies like RxAmerica, CVS/Pharmacare and Argus think their business models give them an edge over the "big three" pharmacy benefit managers in this major new market. If they are right, it could transform the entire US pharma sector.