Diversified Pharmaceutical Services Inc.
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Latest From Diversified Pharmaceutical Services Inc.
After several years of intense consolidation, many medical products companies--the healthier ones, at least--seem to be taking a breather. Drug mergers are way down, while medical devices has become a buyer's market. And biotech consolidation isn't likely anytime soon. Only in slow-growing diagnostics is consolidation the rage.
The proposed merger of SmithKline Beecham and Glaxo Wellcome PLC sent waves of anxiety when it was announced--and relief when it was canceled. The deal ran aground because of disagreements over who would run the company. But the larger questions it raised--about the need for greater critical mass in R&D and the likelihood of future mergers--won't go away so easily.
PBMs have historically positioned themselves as drug-industry antagonists, pushing generic substitution and aggressively driving prices lower. But now one independent PBM is arguing that far from being in the enemy camp, branded pharmaceuticals, even high cost ones, can actually contribute to reducing overall medical costs by lowering spending in other areas. And they're developing the data to prove it.
Customers are seeking risk based relationships with manufacturers, but developing such offerings requires a new way of thinking and a new set of capabilities. For companies that play the game well, risk can also offer rewards.