- Once UnitedHealth's $12.8 billion acquisition of pharmacy benefits manager (PBM) Catamaran closes, the insurer it will become the third largest PBM in the U.S.
- In terms of size, Express Scripts Holding Co. and CVS Health Corp. are the numbers one and two PBMs, respectively.
- The acquisition of Catamaran will provide UnitedHealth help with administration of drug coverage in health plans, as well as in overseeing patients' drug use and maintaining lists of covered drugs.
The power of the PBMs is undeniable. All told, Express Scripts represents 90 million people, while CVS represents another 65 million. And once UnitedHealth completes the Catamaran transaction, it will represent a total of 65 million people.
So what does it all mean? One word: More leverage against drug makers.
Since the advent of very costly hepatitis C drugs, such as Gilead's Sovaldi (sofosbuvir) and cancer drugs such as Amgen's Blincyto (blinatumomab), PBMs have been fighting back—hard. At a cost of $1,000 per pill for Sovaldi and a monthly cost of $64,260 for Blincyto, payers feel justified in wrangling better costs from biopharma companies, and PBM consolidation like the UnitedHealth deal will only strengthen that trend. Pharma has officially been put on notice.