Division of CVS Health Corp.
Latest From AdvancePCS
New Medicare reimbursement, if implemented as is, will disrupt the close-knit oncology marketplace, Expensive new drugs are relatively immune to discounting pressures that form the basis of the reimbursement formula. Nevertheless, infrastructure changes wrought by the squeeze on oncologists' margins will impact the relationship between manufacturers and physicians.
As biotech products ripen, manufacturers facing the prospect of launching complex, expensive drugs are turning to specialty pharmacy providers for help. A new breed of business, they provide clinical and logistical support. The recent entry of PBMs into the specialty pharmacy arena, along with new Medicare rules, is likely to accelerate pricing pressure on manufacturers and affect their relationships with distributors, payers, and providers.
Manufacturers in the past haven't paid much heed to health plans' half-hearted efforts to reign in biotech drug spending. They figure if the drug is good enough, payers have to cover it. But health plans are for the first time serious about managing specialty pharma spending. Manufacturers should take heed because the impact on their revenues and marketing strategies could be significant.
After the failure of the drug company/PBM mergers of the mid-1990s, the notion that pharmacy benefit managers can play a strategic role in drug selection finds few takers among drug company executives who, instead, now embrace a status quo ante bellum view that new, innovative products and strong brands succeed or fail without the influence of PBMs. But several recent trends, including a significant industry consolidation, have left a core group of market leaders bigger and more focused than ever. In particular, the growing influence of the Internet as both a tool and information source and the likely passage of Medicare drug coverage should make PBMs more influential in product selection and formulary management. Behind both lies a newly empowered consumer, a force that has bedeviled PBMs in the past but which they now seek to embrace. Express Scripts officials argue that their focus on traditional PBM values should, if anything, make them more, not less relevant to drug companies in the future.
- Therapeutic Areas
- Advance Paradigm Inc.
- North America
- Parent & Subsidiaries
- CVS Health Corp.
- Senior Management
David Halbert, Chmn. & CEO
Yon Yoon Jorden, EVP, CFO
John H Sattler, SVP, Sales
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Phone: (972) 830-6199
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Irving, TX 75039
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