PCMA chooses a med device exec as its new president and CEO

As previously announced, Mark Merritt, longtime head of the Pharmaceutical Care Management Assn., is stepping down at the end of this year. Now, he will be replaced by JC Scott, currently the Chief Advocacy Officer for the Advanced Medical Technology Assn. (AdvaMed).

The transition is well-timed: just this week, the Justice Dept. essentially signed off on the $52-billion merger between Express Scripts, the US’ largest PBM, and Cigna, a leading insurer. Press reports indicate that a favorable decision is also likely in the $69-billion merger of CVS Health and Aetna, announced last year, which is still being reviewed by DoJ and others. The No. 3 PBM, OptumHealth, is a subsidiary of insurer and healthcare provider United Health. And while these three are by no means the totality of the PBM business, they are the dominant members of PCMA, and represent roughly three-quarters of covered lives in the US. Thus, the PBM business is now changing into a business owned and operated, for the most part, by health insurers themselves, with a side dish (via CVS Health) of retail pharmacy.

For the pharma industry, this transformation represents a consolidation of buyers—bad news for sellers under conventional economic theory. For years, the battleground over who gets the biggest slice of a pharmaceutical purchasing dollar has been shifting to specialty pharmaceuticals, and that will continue even as the entire value chain---manufacturers, pharmacies, PBMs, insurers and healthcare providers—is under pricing pressure.

Scott has big shoes to fill—Merritt saw PCMA grow from “an obscure group into the nation's leading voice on prescription drug benefits” (this from a PCMA announcement)—and those shoes were shaped by prior experience in health insurance advocacy, which happens to be the same prior experience as Scott. As the AdvaMed exec responsible for “coordinating the government affairs, grassroots, media relations, communications and alliance development” (as PCMA puts it), he was undoubtedly involved in the fight over the past couple years over the med device tax, which has been postponed to 2020 by the budget bill signed by President Trump at the beginning of this year.