CHICAGO--(BUSINESS WIRE)--U.S. pharmacy benefit managers (PBMs) should be able to generate significant reimbursement to remain financially viable, as long as companies demonstrate value by moderating the growth of payor drug spending, according to a Fitch Ratings report.
The PBM industry has increased transparency regarding pricing and rebates to payors, although pressure to further improve transparency persists which could pressure margins by limiting the industry's negotiating levers.
Normal tensions between PBMs and retail chains will persist, potentially leading to lower volume and margins for the PBMs.
Persistently high employment has reduced the rolls of the insured. Patients without health insurance generally use fewer healthcare services and products, and the currently soft prescription utilization trends highlight this issue. Fitch expects the dynamic of weak employment and resulting soft utilization will continue during the intermediate term.
The long-term trend of increased generic utilization will continue for at least the next three years. This trend should support PBM margins given the higher margins that generic drugs offer PBMs relative to their branded counterparts.
Going forward, Fitch expects PBMs will further increase their presence in the specialty drug segment, as it offers significant revenue and margin opportunities. The anticipated near-term entry of biosimilars into the U.S. market will provide PBMs further margin opportunities.
The full report 'Navigating the Drug Channel: Pharmacy Benefit Managers in Flux' is available at 'www.fitchratings.com.' This is the fourth in a series of comprehensive reports analyzing various segments of the U.S. drug channel.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: Navigating the Drug Channel: Pharmacy Benefit Managers (PBMs) in Flux
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=674982
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