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  • eliminate_floor_traders eliminate_floor_traders May 9, 2008 9:51 PM Flag

    why cvs + pbm was smart move


    The trend today in many industries has been consolidation so there is less competition and greater profitability. CVS has the right idea. They saw that retail was not a consolidation project. PBM consolidation is. Thats what's been going on and thats why pbms have the power in the script delivery supply chain. If I was cvs I would continue to buy other pbms as fast as they can. Set up regional filling centers and squeeze the retail boys out. I would raise fees charged to pharmacies and offer the companies buying the programs they manage lower rates. Raising fees shifts the profit for cvs but costs all other chains even wally etc money. The more employers they get the faster they can hurt retail pharmacies. Owning a pbm and raising fees through market power will give cvs an edge over all retail delivery points. This is what the pbm's have been doing. By raising fees to pharmacies they take wag money and offer lower rates to employers.

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    • cmxsux...

      you stated "Once mail order is required to start applying MAC on generics you are going to see the industry become a wasteland, especially if fuel prices remain high and continue to increase their expenses to deliver the rx to the patient. The trend in the industry is definitely towards transparency contracts which make the $30 billion or so expense of purchasing a pbm/mail order of size a poor investment idea. "

      My perception is that some clients are already MAC'd at mail. I am incorrect?
      Are you referring to across the board mandatory MAC. I bet PBMs will play with the timing of when MAC is executed as well.