What does the latest PBM acquisition mean for you?

The latest acquisition will change the pharmacy benefit manager (PBM) landscape. The players may be shifting, but one thing remains true — Prime’s integrated model stands apart.

As the health care industry continues to evolve, the rate of mergers and acquisitions is gaining speed. This is no exception for PBMs. The planned acquisition of Catamaran by OptumRx, part of UnitedHealth Group (UHG), shifts the market share among some of the biggest PBM players. More importantly, this transaction is a $13 billion confirmation of the value of the integration of medical and pharmacy. By acquiring Catamaran, OptumRx will drive revenue by shifting millions of members to a carve-in pharmacy benefit.

Prime has practiced integration since day one. Our connections (formed through our ownership by not-for-profit health plans) and member focus stand apart.

The OptumRx/Catamaran deal will create a new, large competitor on the national stage. With this move, UHG has taken an approach opposite of what we’ve seen with other national health insurers. Instead of outsourcing pharmacy benefit management, like Aetna and Cigna, UHG is growing its in-house PBM.

This move establishes a new ranking of the top four national PBMs by size,[1] each having a different business model:

  1. Express Scripts is a standalone, carve-out PBM.
  2. CVS Caremark (CVS) offers both PBM and retail pharmacy services.
  3. OptumRx offers carve-in PBM services through its connection with UnitedHealthcare.
  4. Prime Therapeutics offers carve-in services with participating Blue Plans. It’s the only PBM owned by not-for-profit health plans and not publicly traded.

Merging OptumRx and Catamaran can be expected to come with its fair share of growing pains. It could take years for the two companies to start working as one. Unlike Prime, who’s been connected with Blue Plans since its inception more than 25 years ago, this newly combined PBM was not built on integration.

Deutsche Bank Markets Research on the PBM industry notes: “…while both PBMs use Catamaran’s Rxclaim platform, the companies run different versions of the systems and some changes will need to be made if the companies want to integrate the PBMs and get them on the same platform.”[2]

This temporary disruption does create new employer sales opportunities. Prime's sales teams will be working closely with your plan to maximize these opportunities. 

Prime can drive better savings and outcomes
On a national basis, Prime ranks fourth among PBMs by market share. However, our Blue Plan clients are market leaders in most of the states in which they operate. Prime leverages that local market leadership on a national scale. This means:

  • Our national negotiating power remains strong.
  • Our ongoing work to align our Blue Plan clients on network and formulary strategies will continue to strengthen this position.
  • Our unique ownership model by not-for-profit Blue Plans makes our focus on overall cost of care and serving members’ best interests more compelling.

 “The deal merging OptumRx and Catamaran Corporation confirms our belief in the Blue + Prime business model. It’s the comprehensive approach that our clients and members want and need. It’s what will continue to allow us to help people get the medicine they need to feel better and live well.”   – Jim DuCharme, President and CEO, Prime Therapeutics

Prime’s unique ownership structure helps us better control overall drug spend. Together with Blue Plan clients, we answer to members and clients, not Wall Street. Because of our integrated model and member focus, we see the big picture of member health, not just pharmacy costs. And that can lead to better outcomes and lower overall costs — for everyone.

[1] Prime internal research. (2014).

[2] Industry Update. Deutsch Bank Markets Research, Pharmacy Benefit Managers Industry Report, United States Healthcare Technology & Distribution. 7 May 2015. Deutsche Bank Securities Inc.

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