The pharmacy benefit management (PBM) industry used to occupy a rather small, obscure corner in the back offices of the American healthcare system. PBMs were just prescription claims processors. But over the past 20 years or so, the industry consolidated and the remaining companies became powerful middlemen in the complex pharmaceutical supply chain. Now the industry has an increasingly high profile (not always for favorable reasons) and has consolidated even further, with its large players owned by or partnering with even larger companies. Yet plenty of smaller players have survived and even thrived by finding a niche, such as workers’ compensation, specialty drugs or certain types of diseases.
Supreme Court justices on Tuesday questioned whether states have the authority to regulate how much middlemen hired by insurance plans pay pharmacies. During oral arguments, several justices asked about the burden health plans face since many states have a patchwork of PBM regulations. The case, Rutledge v. Pharmaceutical Care Management Association, could decide the fate of those state PBM regulations. The justices are weighing whether the Employee Retirement Income Security Act allows states to force pharmacy benefit managers to pay pharmacies at least their cost of acquiring a drug.
PharMerica completed the acquisition of OnePoint Patient Care (OPPC) on Wednesday. OPPC is one of the nation’s largest (and the largest non-payer owned) provider of dedicated hospice pharmacy and pharmacy benefits management (PBM) services, serving more than 350 unique hospice providers. OPPC is the only hospice pharmacy provider of scale offering same-day local dispensing and delivery through owned pharmacies, a key differentiator and enabler of optimal customer service. OPPC operates 15 pharmacy locations across the United States today.
Startup pharmacy benefit manager Capital Rx is teaming up with Walmart to bring greater transparency to specialty and mail-order prescriptions. Capital Rx provides PBM services to employers and health plans through its “clearinghouse” model, in which they provide unit costs for drugs upfront to clients. The model is also designed to prevent “spread pricing,” in which a PBM charges a payer significantly more than a pharmacy’s price for a drug to reap profits. Joining up with Walmart, a company that was early to sign on with Capital Rx, makes the PBM the first to offer that price transparency across retail, specialty and mail-order medications.
Anthem’s pharmacy benefit manager IngenioRx will acquire ZipDrug, a data-driven pharmacy management company. The acquisition expands IngenioRx’s offerings to include a platform that directs consumers to pharmacies with high-performing pharmacies and that offers home prescription delivery, the insurer announced Monday. IngenioRx will offer ZipDrug’s services both integrated into its broader PBM platform and as a standalone service, according to the announcement. Financial terms and a timeline for the deal to close were not disclosed. Anthem launched IngenioRx in mid-2019, moving up the launch as a result of Cigna’s acquisition of the insurer’s prior PBM, Express Scripts. Anthem’s members will be covered by IngenioRx, and the insurer is also selling the PBM’s services to other health plans.
During the last year, Optum, UnitedHealth Group’s pharmacy benefit manager and care services group, has continued to grow as a major presence in the healthcare industry. Here’s a timeline of Optum’s key updates, reported by Becker’s Hospital Review. The breakdown includes Optum’s moves since June 2019.
RxSense, a high-growth healthcare technology company that utilizes its proprietary technology platform to provide innovative prescription savings solutions to consumers and pharmacy benefits administration and analytics to enterprise customers, announced a significant investment by Parthenon Capital, a growth-oriented private equity firm that has managed funds with more than $5 billion in total capital commitments. Proceeds from the transaction will be used for various growth initiatives. Terms of the investment were not disclosed. At the core of RxSense is an industry leading pharmacy benefits technology platform that provides flexible solutions, enabling efficient management and greater transparency and access to prescription savings.
Wholesale retailer Costco is expanding its footprint in the pharmacy benefit management business by purchasing a minor stake in a PBM owned by St. Louis-based hospital system SSM Health. SSM Health said the deal would allow the not-for-profit system to tap into Costco’s expertise and expand its transparent PBM model, called Navitus Health Solutions, to more people. The deal also includes a specialty pharmacy subsidiary. Costco, meanwhile, could benefit if Navitus members are steered toward Costco stores and clinics, analysts at investment banking and advisory firm Evercore ISI wrote in a research note Wednesday. The retailer could also increase the reach of its own internal PBM business, depending on whether Costco’s own internal PBM integrates with SSM Health’s.
Optum revenues surpassed $100 billion for the first time in 2018, and the company spent the past year making key acquisitions and investments. In addition to its $4.3 million DaVita Medical Group acquisition, which was finalized earlier this year, and its partnership with John Muir Health to manage nonclinical functions including IT and revenue cycle, Optum has made six other key investments and acquisitions in technology companies this year.
A big part of the Trump administration’s plan to lower drug prices is now dead, White House spokesman Judd Deere confirmed to Axios. The administration is backing away from an effort to change the way money flows through federal health care programs Ñ one of the most sweeping elements of its drug-pricing blueprint. That’s bad news for pharma, and the move will put pressure on other parts of the administration’s plan, which is also bad news for pharma. The now-dead proposal would have overhauled the rebates collected by pharmacy benefit managers Ñ the middlemen between insurance plans and drug companies.
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