Friday, March 9, 2018

Opuscula

Insurer wants
To acquire
Pharmacy

ADVISEN FPN noted that insurer Cigna wants to buy Express Scripts, a mail order pharmacy.

According to Money.com (http://tinyurl.com/y8dbemd6),

    Cigna is one of the country's largest health insurers, and Express Scripts is one of America's biggest pharmacy benefits managers, which administer drug plans for more than 266 million Americans with employer, government health insurance, and Medicare Advantage plans.

This has to cause a skeptic to wonder: What is this going to do to pharmacy pricing?

(Truth in blogging: My Medicare Advantage plan offers prescription home delivery via Express Scripts; OTC medications are provided for several plans in my geographic area by OTC Health Solutions and CVS Health.)

IT MIGHT SEEM to be in the best interests of an insurance company (Cigna) to own “one of America's biggest pharmacy benefits managers” (Express Scripts). The insurer could pressure the benefits manager to in turn pressure ethical pharmaceutical companies to lower their prices; Express Scripts is one the largest players in its field.

But the skeptic suggests that this won’t happen.

Why?

In a word, “Medicare.”

There may be other words, such as “VA hospitals,” military hospitals, and government clinics.

The commonality of all the above is “government paid” medications.

While most of my medications are “free” to me (I have $0 copays), the company providing my Medicare Advantage plan has to pay.

The insurer gets the major chunk of the money I pay to Medicare each month (after having paid into Medicare since it’s inception in 1965) PLUS another substantial sum from our favorite uncle (Sam) for any expenses I might cause the plan. Insurance is, after all, a business; a big business.

Hopefully, I’m wrong and if Cigna buys Express Scripts and instructs Express Scripts’ purchasing agents to pressure the pharmaceuticals to hold the line on prices, perhaps everyone buying prescription medications will benefit.

Money.com notes that

    The merger could give Cigna more control over drug prices, which is a major issue for insurers. Rival insurer Anthem said last year that it would partner with CVS to start its own prescription drug plan manager. And UnitedHealth already has its own drug benefits manager, OptumRX.

The Cigna-Express Scripts merger, if allowed, would follow similar mergers between CVS and health insurer Aetna, Albertson and part of Rite Aid, and Walgreen with what remained of Rite Aid last year.

Meanwhile, a federal judge prevented merger attempts between Cigna and Anthem and between Aetna and Humana. The Justice Department sued to block both deals.

Given the Feds blockage of insurers (Cigna and Anthem, and Aetna and Humana), it s anyone’s guess if a Cigna-CVS merger will get a Federal green light as CVS now owns Aetna. (CVS could divest itself of Aetna if the price is right.)

The question remains: What is the likely outcome for the consumer?


PLAGIARISM is the act of appropriating the literary composition of another, or parts or passages of his writings, or the ideas or language of the same, and passing them off as the product of one’s own mind.

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