PBMs As A Short-Term Story…I’m Doubtful

While I certainly think the PBM market is going to evolve with increased use of generics, the Express Scripts acquisition of Medco, and the growth in specialty pharmacy, I have to disagree with Matthew Herper from Forbes and Richard Evans of Sovereign & Sector who talk about them as a short-term solution that will struggle (see point 5 in this article). 

I think Mark Merritt from PCMA did a nice job of talking about this when I interviewed him last year about how PBMs have continued to change and will continue to evolve over time.  I also think that Per Lofberg’s comments from earlier today reflect this.  There is still a lot of opportunity around specialty spend.  Certainly, the market dynamics put pressure on the traditional margin areas of generics and mail order for oral solids, but these companies are here to stay and I believe valuations will stabilize even if not at the highs of 5 years ago.  

And, while in general specialty management has been a stagnant space for innovation over the past 5 years, I expect that to change.  I think we’ll see more collaboration with manufacturers both around REMS programs and outcomes-based contracting.  I think we’ll see continued evolution in the area of genetic testing and clinical support.  I think we’ll see the traditional utilization management programs and formulary management programs show value with the growth of competitive products and bio-similars.  I also believe that understanding how to help patients manage their condition and start to take a broader role in overall condition management will and should create PBM opportunities.