Retrenching? – Specialty Pharmacy

PBMs getting into the specialty pharmacy business has been the focus for much of this decade. It was considered a logical extension of their core services – claims processing, customer service, trend management, fulfillment, supply chain, and rebate negotiation.

But, in the course of 3 weeks, I have had 3 people (none of them at Express Scripts) ask me if Express Scripts is selling specialty. Given the disparity of these people, I have to believe it’s being considered. When I asked someone at the company, they were shocked at the thought of it.

Express Scripts bought Curascript and subsequently Priority. I can’t see them putting all of those assets on the block, but I could be wrong. That would be an interesting change. George Paz [CEO] is known for his great focus on the bottom line and driving the share price so I wouldn’t doubt that if these were underperforming assets then they would be re-evaluated. But, given today’s market, I can’t see how they will get back what they paid for them.

The company has driven the stock relentlessly over the past 10+ years. I know in one case he even went to a client where they were losing money and demanded a price increase. You don’t hear about those types of negotiations very often.

So, I guess the true question is what would this mean. Would it mean that specialty doesn’t belong in a PBM? If they sold, is it their issue or an industry issue?

More interesting perhaps, is what would they do with the money? As I talked about before, Express Scripts has lots of cash and has stated they are looking for an acquisition. If they were to sell some or all of their specialty business, they would have even more cash to pursue something else.