Strategic Alliances And The Value Of Consolidation

Little enthusiasm is left for the notion of coordinated pharmaceutical care, even among pharmacy benefit manager acquirers, according to David Cassak, managing partner at Windhover Communication. The new industry heroes are Pfizer and Amgen, not Merck and SmithKline Beecham, he told those attending a Pharmaceutical Strategic Alliances conference in the USA recently.

Integration with core prescription drug businesses has been elusive, he said, and the ability of these ventures to move prescription products has been a failure. The need for dramatic overhaul of the drug business fizzled with the demise of President Clinton's health care reform plans, so that there was no need to buy a PBM to get the benefits managed care could provide for market share. And Mr Cassak also feels that the value of the data made available by PBMs will prove to be an illusion. Companies have returned to placing primary value on their pipelines, he noted, since offering services such as PBMs has proven to be a much riskier, lower-margin business.

There have been five shifts in the health care marketplace, he said.