Magazine article Drug Topics

PBM Shock

Magazine article Drug Topics

PBM Shock

Article excerpt

Perhaps it's expected when a pharmacist expresses "shock" at the impact pharmacy benefit management firms can have on the profession. But when the pharmacist is also a respected Wall Street analyst and consultant, Hemant K. Shah, perhaps it's worth noting. "What PBMs can do to retail pharmacy is a disaster," said Shah, president of HKS Associates & Co., last month.

Shah, speaking at the National Association of Boards of Pharmacy executive officers conference, said that under PBMs community pharmacists could become administrators of dispensing pharmaceuticals instead of independent businesses. They'll be told to dispense from a formulary of 100-120 prescription drugs instead of the 500-1,000 available. They'll be offered a $5 dispensing fee on a take-it-or-leave-it basis. "All of a sudden the business you are in, buying drugs, marking them up, dispensing, and so on, is going to disappear," Shah said.

The emergence of PBMs is very serious for community pharmacy, he continued, because they control plan sponsors and the patients. The top three PBMs control 75% to 80% of the market, and that is still growing. "Remember, these PBMs are in business to make money for their parent, which is Merck or SmithKline, or others. And they are not going to give even a penny more than they have to," he said.

In Shah's view, the consolidation that has rocked the pharmaceutical industry will continue until just five to eight large companies remain. Size is needed so sufficient resources can be devoted to true breakthrough drugs, instead of the me-toos of the past. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.