July 26, 2011 
The covered lives calculation is a little funny since a “life” can be counted by multiple PBMs. For example, look at the Federal Employee Plan (FEP) contract which until recently was split between Medco and CVS Caremark and therefore counted by both (I assume). But, it is a measure that is used none the less. [Another way is based on claims processed.]
So, what I did is take the numbers from this chart on the PBMI website and make the following adjustments:
- I focused just on the large PBMs that provide a full suite of services (to my knowledge) and were on this original list which excludes some such as Navitus or WelldyneRx.
- I added the Express Scripts and Medco lives together.
- I subtracted 10M for the United Healthcare (UHG) contract at Medco and moved those to Prescription Solutions (now called OptumRx). (acknowledging that this doesn’t happen yet)
- I subtracted 8M for the FEP loss for Medco recognizing that those don’t show up at CVS Caremark since they would already have been counted there on the retail contract.
- I added together the CatalystRx and Walgreens lives from their deal earlier this year.
- I noted that Humana’s lives are counted under the Argus number.
With that, I get the following lives count and percentage marketshare (of the companies listed).
Enabling Healthy Decisions 
Occam’s razor: AIS data are unreliable.
Hmmm. According to the Census, there were 255 million people with health insurance in 2009. (http://www.census.gov/hhes/www/hlthins/data/incpovhlth/2009/highlights.html). Only 201 million had private health insurance.
Yet just these 11 organizations represent 386 million lives?
Something doesn’t add up…
It is interesting…isn’t it? If you add in the other “PBMs” from the AIS / PBMI list, you would have another 100M+ lives.
That’s why it’s a good metric for understanding relative size and/or breadth of services, but it doesn’t give you much insight into their true business size.
What I’d like to do is adjust PBM revenues based on excluding drug costs that simply flow through to the retailers and look at their size based on true revenues collected (admin fees), rebates kept, and mail order prescriptions (traditional and specialty). I think that would paint an interesting picture of true size and better reflect profitability than when the numbers are diluted with the huge cash flow to the retailers.