Biotech Values

[DewDiligence]

Re: The PBM industry

We control those costs by bringing the pharmacy "in-house" and bypassing their specialty units. We can buy those products cheaper and pass the savings directly to the plan benefit. This concept really ticks off the PBM.

On a recent investor presentation, Medco said the above can’t be done because Medco’s disease-specific TRC’s have efficiencies of scale that even a large hospital group can’t match. I presume you disagree with this claim.

The three largest PBM’s have a combined market cap of about *$60B. If these companies are as useless to their clients as you suggest, the PBM industry ranks as one the largest corporate scams of all time.

As an aside, companies such as Medco assert to investors that they are not the least bit concerned about healthcare reform because reform will end up increasing their profits. Is this just more BS, IYO?

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*After deducting a portion of CVS’s market cap for the non-PBM business.