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WellPoint decision to sell off its PBM business is seen by experts as good, strategic move for the health insurer.
WellPoint has put its pharmacy benefits management (PBM) business up for auction, which is likely to attract interest from CVS Caremark, Medco Health Solutions Inc. and Express Scripts Inc., among others.
Wellpoint’s decision to place their PBM up for auction is a good strategic move, believes Robert Taketomo, PharmD, MBA, president and CEO of Ventegra in La Jolla, Calif. “The PBM industry has been one of the most profitable industry segments and the stocks still trade at relatively high valuations. Loss of PBM functionality should not hurt Wellpoint if they still maintain control of the key pharmacy and medical decisions.”
According to Clive Riddle, president and founder of MCOL, a provider of business-to-business health management and managed care resources in Modesto, Calif., many large health plans have in-house PBMs, and “there is often intense pressure from the analyst and investor community to imitate such initiatives.” It is unlikely that WellPoint will be the only plan to go down this path in the near future".
The sale of WellPoint's PBM business, the fourth-largest in the United States, is said to be worth anywhere from less than $1 billion to five times that amount.