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Headlines about the merger of Humana and Walmart might have been more shocking in a year when readers weren’t already trying to comprehend mega-mergers like Cigna-Express Scripts, CVS-Aetna, Walgreens-Rite Aid and a half dozen smaller deals. As things stand, health insurers and retail drug chains are the undisputed celebrity acts in the theater of merger mania — with pharmacy benefit managers (PBMs) taking an unlikely star turn.

Express Scripts, remember, is America’s largest PBM. CVS Health also runs its own PBM, and United Healthcare, the country’s largest insurer, is more than a bit player. It wants to fold DaVita Medical Group into its Optum unit, which owns OptumRX, the third of the Big Three PBMs. Optum has already partnered with CVS to better compete with the combined Walgreens-Rite Aid chain. Together, the Big Three PBMs control nearly three quarters of all drug prescriptions filled in the U.S.

From a biopharmaceutical perspective, all of this drama signals much greater concentration and corporatization of drug purchasing decisions. But so far, there’s little sign of how manufacturers intend to respond. What role can they play when the stage sets are constantly under construction? Is there any route, or rationale, for biopharma to reclaim center stage?

To date, most biopharma mergers have been strictly in the family: big players circling one another or snatching up smaller contenders. On the few occasions when manufacturers have ventured from their comfort zone, the results have been less than stellar — as when Merck acquired Medco, a PBM/mail-order pharmacy, in 1993. Merck eventually spun off the unit, and it’s now part of Express Scripts.

Today, however, there may be reasons for biopharma to revisit cross-boundary alliances that could strengthen manufacturers’ leverage within larger healthcare entities. For one thing, pricing power is steadily migrating from brand owners to payers. If Washington approves the latest mega-mergers, OptumRx, Express Scripts and CVS will all be owned by or intimately tied to insurers.

Traditionally, a PBM would be responsible for negotiating with the pharmacy over reimbursement, as well as the manufacturer for rebates. Now, the same entity will contract with manufacturers to receive discounts, negotiate rates with pharmacies, set premiums for consumers, and implement utilization management policies. In the past, some PBMs did not pass back all of the rebates to the insurer. Now, the PBM is the insurer.

As more and more healthcare delivery shifts from independent hospitals and physician practices to integrated delivery networks and franchised retail settings owned by UnitedHealthcare, Cigna/Express , CVS/Aetna, or (gasp) Walmart-Humana, manufacturers may, literally, lose a seat at the table where pricing decisions are taken.

What’s more, in a world where streams of healthcare data are as valuable as tangible assets, the idea of a retailer-payer-PBM oligopoly that touches every prescription-, claims-, and consumer health database is an intimidating prospect for any competitor.

Returning to the question of how pharma can perform on this stage, we don’t anticipate headlines about biopharma companies acquiring retail drug chains or hospital systems. But manufacturers will soon feel pressure to re-examine their core competencies in light of an industry-wide shift toward vertical integration in a franchised, heavily automated, and data-centric healthcare ecosystem. As we’ve seen, the theater of merger mania is under construction. There’s still time to rewrite the next act of this play.

To learn more about the forces reshaping healthcare, read more perspectives on this topic from Managed Markets Communications, a Syneos Health company, or contact Danielle Bedard from at [email protected]