Blue Cross Nova Scotia Health Insurance
Case Study: Do PBMs Profit at Expense of Their Clients and Consumers?
Recent state investigations and several lawsuits have begun to raise the question of who benefits the most from PBMs. Do PBMs keep the savings they negotiate for their own profits rather than passing them on to consumers? Do they pad their profits by steering consumers to more costly drugs instead of the highest quality drugs at the lowest cost?
Although 60 PBMs administer drug plans nationwide, three companies (Caremark, Express Scripts, and Medco) control close to half of the business. According to financial data submitted by these three companies, they enjoyed billion dollar earnings in 2003. Caremark had revenues of $9.1 billion managing more than 114 million prescriptions. Advance PCS recently merged with Caremark, but before the merger rolled up $14 billion in annual revenues and managed 502 million prescriptions. Express Scripts had $13 billion in revenues and processed more than 410
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