Former tops execs at GSK and Lilly are going to try their hand at running PBMs. If they need advice, they can ask their predecessors from the 1990s, when big pharma ran the big three PBMs.

Some health care firms have managed to work around the industry's well-documented growth constraints by pursuing a strategy of convergence--finding new combinations of formerly distinct market segments for pharmaceuticals, devices, and diagnostics. The authors, at Bain & Company, outline the considerations that drive the evaluation of and set the stage for convergence opportunities. Companies can use them to capitalize on an array of opportunities throughout the commercialization continuum and develop a response to potential threats from the outside.

Given the enormous proposed market caps on drugstore.com's and PlanetRx's IPOs, you could be forgiven for inferring that the Internet pharmacies are as close to a real business as anything to come out of Silicon Valley's dream factory. But you'd be wrong. Risks abound. And one big problem is access to reimbursed patients. Drugstore.com's costly deal with Rite Aid shows just how much the Internet pharmacy was willing to pay, both in terms of dilution and strategic flexibility, to get a solid connection with patients who have drug benefits.

SB's decision to sell its DPS pharmacy benefit management business leaves Merck as the only drug company still owning its own PBM. It also creates a powerhouse PBM in the managed care marketplace.