Selling NextRx to Express Scripts

I was hoping I might get a chance to sit down with Angela Braly (CEO at Wellpoint) at the WHCC 2009 in DC to talk about the sale they announced yesterday NextRx to Express Scripts).  I think it’s a very logical decision, and I think they got a good price.  For my old team at ESI, there is a huge opportunity for them to drive mail volume.

In her keynote discussion this morning, she briefly mentioned the sale saying that they sold it to help lower healthcare costs.  While I completely agree in the short-term (i.e., rebate contracting, network negotiations), I remain mixed in my long-term view.

I talked briefly with Les Masterson about this yesterday for the article he just published – “PBM Sale Highlights Dilemna for Health Plans“.  I do expect this will push for the development of a new business model which will highlight automation, member engagement, and a greater role in driving outcomes.

George Van Antwerp, vice president, solutions strategy, at Silverlink Communications, Inc., in Burlington, MA, says health plans can benefit from having their own PBMs if they use them properly.

“I think that it’s beneficial to plans to own their own PBM if they can integrate data and create a better member experience; make the tradeoff between increased pharmacy spend and lower medical loss ratio; and manage to get most of the economies of scale in terms of operations and negotiation. That has proven hard to do within health plans, and therefore, there will be short-term interest in capitalizing on the valuation of the PBM business,” says Van Antwerp.

With three large PBMs left after the pending purchase, Van Antwerp says the trio will “race to the bottom in terms of negotiating scale leverage.” Van Antwerp predicts the remaining PBMs will ultimately try to differentiate themselves by offering healthcare management through member engagement, greater transparency, and a renewed focus on health outcomes.

No comments yet... Be the first to leave a reply!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: