Replies to post #72677 on 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.

[DewDiligence]

CVS settles FTC suit re cheating Medicare Part D patients:

http://online.wsj.com/article/SB10001424052970204409004577156760945550798.html

The FTC alleged that from 2007 until at least November 2008, RxAmerica [acquired by CVS in Oct 2008] posted incorrect prices for certain Medicare Part D prescription drugs at CVS and Walgreens pharmacies. The actual costs of some drugs were as much as 10 times more than RxAmerica's posted rates… Because of the deceptive prices, elderly and disabled consumers chose RxAmerica drug plans and paid significantly more than they expected for their prescriptions at CVS and Walgreens, the FTC alleged. Thursday's settlement requires CVS to pay $5 million in consumer refunds.

CVS said in a statement that RxAmerica's posting of inaccurate pricing was inadvertent…

Uh huh.