For the last 30 years or so, the pharmaceutical landscape has been dominated by pharmacy benefit managers (PBMs). With new “disruptive” market entrants, how does the PBM landscape change, how are consumer perceptions altered, and how do pharma marketers stay ahead of the game to deliver differentiated value for brands?
Low-cost Generic Offerings
PBMs have used their purchasing power to negotiate rebates and manage formularies since their inception. In addition to the revenue they drive through contracts on branded products, they generate profit through administration fees for all claims they process and the direct sale of drugs—both branded and generic—through their own mail-order pharmacies. Previously, marketers have played their part by contracting with PBMs to gain market share for their brands, often competing with other branded therapies within the same class. Today, the playing field has changed with the influx of companies such as Amazon, Cost Plus Drug Company, and Kroger that aim to take the middleman out of the generic drug market to provide even lower-cost medications.