Merck-Medco Managed Care

In 1993 and 1994 Merck, Lilly, and the then SmithKline Beecham all bought PBMs. In addition, Bristol-Myers Squibb had bid against Merck, and Pfizer and Johnson Johnson at one point considered purchasing benefits managers, too. Yet by 1999, Lilly and SmithKline had sold theirs at a loss, and Bristol-Myers, Johnson Johnson and Pfizer never got in. Merck alone seemed to be able to make its PBM, Merck-Medco Managed Care, work. By 2001, its market share was nearly 29 percent by 2002, it handled the prescriptions for 65 million people, or almost one-fourth of all Americans. 

Actual ownership of the PBMs varies. Some companies are privately held corporations (e.g., National Prescription Administrators). Some are publicly traded (e.g., Express Scripts). Some are now or have been owned by managed care organizations (e.g., PacifiCare s ownership of Prescription Solutions or Prudential s ownership of Integrated Pharmacy Solutions). They have also been owned by retail pharmacy chains, as in the case of Rite Aid s ownership of PCS prior to its evolution into Advance PCS. Pharmaceutical manufacturers have purchased PBMs (e.g., Merck owns Medco and Lilly at one time owned PCS). 

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