OptumRx-Catamaran merger brings further consolidation to US pharma market

Drugs are prescribed by physicians, but increasingly, the price and availability of those drugs are dictated by the pharmacy benefit managers (PBMs). With the proposed acquisition of Catamaran (Schaumburg, IL) by OptumRx, the PBM arm of United Health (New York), the number three PBM (OptumRx) solidifies its position by buying the No. 4 PBM. There had been a trend in recent years of health insurers unloading their PBM businesses (one of Catamaran’s main clients—at least for now—is health insurer Cigna); the OptumRx acquisition, to a degree, reverses that trend. Simultaneously, more of the chain-drugstore channel is hooking up with PBMs; witness last month’s announced acquisition of EnvisionRx by Rite Aid.

The top three PBMs represent exactly two-thirds of the prescription market, and the top seven (now six) represent 92%, according to data on “equivalent prescriptions dispensed” collected by Adam Fein at DrugChannels.net:

Top PBMs

• Express Scripts
• CVS/Caremark
• OptumRx
• Catamaran
• Prime
• Humana
• Medimpact

The OptumRx-Catamaran announcement noted that one of the drivers for the acquisition is that “Enhanced purchasing and administrative improvements from the combination are expected to drive substantial value, with the majority of savings expected to directly benefit clients and individuals through reduced costs for prescriptions and enhanced pharmaceutical services.”

One element of the PBM-pharma relationship is that several PBMs, including market leader Express Scripts (through its CuraScript distribution business) and Optum (a sister company of OptumRx) provide consulting and drug-development services to pharma. Optum’s website notes that it “supports “hundreds of life sciences companies as they research and develop new treatments.” The ability to quantify clinical outcomes, and to obtain patients for clinical trials, increasingly derives from data generated by PBMs’ and their payer-clients’ investments in healthcare data systems. Such “coopetition” is not unique; the Big Three drug wholesalers all have divisions that provide fee-based services to manufacturers, even as they haggle over the pricing of drugs they purchase. How pharma business managers operate in this ever-more constrained market is the big issue.