The Big Three and Medicare: A Risky Proposition
This article was originally published in RPM Report
As Part D gets under way, it is increasingly clear that the new Medicare drug benefit poses serious threats to Medco, Caremark and Express Scripts.
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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.
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.
The Medicare drug benefit means more federal spending on pharmaceuticals-and more oversight of the industry. Two prominent prosecutors are experienced and ready. The first place they will look: contracting between manufacturers and plans and its influence on the formulary selection process.