A few PBM-owned GPOs include Ascent Health Services, which is part of Cigna Evernorth and works with Kroger and Prime Therapeutics; Emisar Pharma Services, part of UnitedHealth Group’s Optum; and Zinc Health Services, formed by CVS Health, according to the report.
Here are five reasons why PBMs have made GPOs, according to Drug Channels:
1. To offer contracting and rebate negotiation services for total formulary volume of a multiple-PBM organization.
2. To make new sources of revenue from drugmakers, which already includes administrative fees — which average between 3 percent and 5 percent of the product’s list price — prescription data services, data portals and enterprise costs.
3. To create a revenue pipeline not shared with PBMs’ plan sponsor clients. Drug Channels said that given the increased scrutiny into the PBM industry, some revenues might be passed to plan sponsors through their GPOs.
4. To allow “tax efficiencies” because of “transfer pricing and rebate accounting using other countries’ lower corporate tax rates” — if the GPO is located outside the U.S.
5. To give PBMs a defense strategy against potential reform of their pricing practices.
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