Changes on the Horizon

Pharmacy Times
Volume 0

Change is the order of the day inpharmacy, and with changecome questions about thefuture.

Witness the recent battle over pharmacybenefits management (PBM)company Caremark, initiated by a $21-billion bid by CVS and a counteroffer byExpress Scripts.

There is speculation that a merger ofthis size could trigger yet more industryconsolidation, with the potential fordeals between other retail chains andlarge PBMs.

Mergers as large as this one generatequestions for patients, for the industry,and, of course, for pharmacists.

If retail chains succeed in acquiringlarge PBMs, however, there are reasonsto be optimistic about the outcome.What is the alternative? Many recentdevelopments affecting our industryhave been driven by forces that wereoutside the control of pharmacy andoften not operating in our interest. Incontrast, mergers or acquisitions drivenby retail pharmacy could put seniorpharmacy executives in a position toshape the future of these combinedcompanies—and, potentially, the evolvingindustry.

This situation would present opportunitiesto show that PBMs can operatefor the benefit of patients and pharmacists.It could bring greater transparencyto the PBM industry and potentiallydrive down overall health care costs forpatients and employers.

Instead of using mandatory mail-orderprograms to drive patients awayfrom community pharmacies, retailerswith a large PBM operation would havea strong motive to ensure that patientscontinue to have access to medicationsthrough their local pharmacist, if theychoose. Giving patients that choicewould enable us to demonstrate thatproviding drugs is not just a commodityservice—that we provide other services,such as information and medicationmanagement, that patients find valuableand help ensure better outcomes.

There are business risks, too. Overthe years, retail chains have experiencedfailures as well as successes intheir attempts to acquire and operatePBMs. Some of the risks appear lowerthis time around, however, due to theadditional business driven by MedicarePart D and the larger market overall.

Change is inevitable in this industry,whether it is driven by legislation,another round of industry consolidation,or the emergence of powerful newplayers. It is up to us to live with theuncertainty, assess the impact, andadapt.

Mr. Eckel is professor and director ofthe Office of Practice Developmentand Education at the School ofPharmacy, University of NorthCarolina at Chapel Hill.

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