A Behemoth is Born

CVS bought Caremark Rx. Read this carefully: Caremark has been sold. More predictions come true, and the rapid acquisitions of specialty pharmacies continue at a dazzling level.

Caremark Rx, Inc., located in Nashville, Tennesee, is the nation’s second-largest PBM. Caremark Rx has recently approved a $27 billion takeover by CVS. The acquisition has created a behemoth with the power to define, redefine, and direct the nation’s pharmacy distribution system. CVS/Caremark will have combined sales of more than $80 billion and rank among the top 20 Fortune 500 companies. Express Scripts, the number three PBM in the country, attempted a hostile takeover of Caremark in 2006. What will Express Scripts do next? Who might they purchase instead?

It can’t be stressed more strongly: Hemophilia patients must follow the rapidly changing acquisitions to know where their health benefits and service will originate, how this will affect their treatment and care, and where their health dollars will be going. For now, it looks like a lot of healthcare dollars will go to Wall Street.

Which Suitor is More Attractive?

Far more interesting than watching Pamela Anderson and Kid Rock or Britney Spears and what’s-his-name marry and divorce is the romance going on between PBMs and certain homecare companies. Express Scripts is one suitor that doesn’t give up easily. Last week I told you that Express Scripts made a hostile bid for Caremark; Caremark jilted it this past week. It prefers the attentions of CVS, which has also bid for its hand. Those of you who use Caremark for your homecare needs better pay attention; and those of you who don’t better pay attention. The marriage of any of these giants is going to continue to impact our community, directly and indirectly. Although allegedly all this wedded bliss is supposed to lower prices of drugs, it remains to be seen in the hemophilia bottom line. What it will do for certain is consolidate power— and squeeze out the market share of smaller homecare companies who are not owned by large specialty pharmacies or PBMs.

Caremark shareholder approval of CVS or Express Script (most analysts are betting on CVS) is the next thing to watch. Tune in—

Book I read this week: “Thunderstruck,” by Erik Larson. **** Four stars
Fascinating true account of a murder mystery in London that riveted the world, and the parallel invention and development of the wireless by Marconi— and how these two events eventually crossed paths with explosive and fateful consequences. Great reading!

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