But what happens when a PBM is owned by a retailer, as with CVS Caremark?
Here's the odd thing: Even though it has joined the PBM revolution, Walgreen is also fighting it.
At first glance, an obvious result of PBM consolidation might seem to be merely lowered drug prices.
One PBM, which declines to have itself named, insists that it can survive without any relationship with Walgreen.
Express Scripts (nasdaq: ESRX - news - people ) is what is known as a pharmacy benefit manager, or PBM.
Express Scripts is a pharmacy benefit manager, or PBM, that works as a middleman between drug-makers and employers when it comes to buying drugs.
Walgreen also started its own PBM, Walgreens Health Initiatives, in 1995.
Thierer notes that the average PBM member takes between 10 and 15 prescriptions per year and those over 65 can take more than 40 prescriptions per year.
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For drugs that have similar clinical benefits, like treatments for high cholesterol, ulcers and allergies, the PBM may put only one of the competing brands on its formulary.
Catamaran (CTRX) used to be known as SXC Health Solutions until July 2012 but it has been revolutionizing the Pharmacy Benefit Management (PBM) segment of the health care industry for years.
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We currently estimate Walgreen to make up almost 19.4% of prescriptions filled annually in the US. Sale of Walgreen PBM business brings in close to 85 million additional prescriptions filled at Catalyst.
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When pharmacy benefit management (PBM) companies Express Scripts and Medco announced their merger on 21 July 2011, the stock market was not optimistic about the companies obtaining antitrust approval from the Federal Trade Commission (FTC).
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This could be accentuated by the fact that the new PBM will have only two large competitors: Medco Health Solutions (nyse: MHS - news - people ) and Express Scripts (nadsaq: ESRX - news - people ).
Last quarter, its PBM revenues grew 32% as it processed 17% more mail choice and 26% more pharmacy network claims compared to the prior year period, benefiting from its leading market share in Medicare Part D prescription business as well as high growth in specialty pharmacy and strong adoption of its Maintenance Choice plans.
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