Many employers and drug plan sponsors wonder if industry consolidationswill result in a decrease in choices and competition in the marketplace --or whether it could have a positive impact on their bottom lines.

"These changes in the industry and the structures of the major serviceproviders should make plan sponsors really sit up and pay attention to whatimpact consolidation could have on their benefit packages and theirfinancial responsibilities," said Brian Bullock, president and CEO of TheBurchfield Group, a consulting firm that helps employers and other plansponsors control the costs of providing prescription drug benefits. "Theindustry is never going to stop changing, so plan sponsors need tounderstand the big picture. Are you offering the most effective benefitspackage you can, and what language in your PBM contract might cause troubledown the road?"

Plan sponsors need to understand what their PBM contracts say in terms ofpharmacy access and exclusivity, which are commonly affected by corporateconsolidation, Bullock said. It's also important to avoid particularlylong-term agreements, especially considering potential changes in pricingbenchmarks as well as structural changes resulting from consolidation.

"Consolidation is certainly not all bad for plan sponsors," said KentWangsness, vice president at The Burchfield Group. "It can open doors tonew services and cost savings that benefit the consumer and the payer. Butas always, the devil is in the details. Not knowing the ins and outs ofyour PBM contract is the one sure way to run into trouble."

To learn more about how industry consolidation might affect a plansponsor's bottom line, listen to the most recent installment of thePharmacy Benefits Podcast. The free audio program, available atwww.burchfieldgroup.com, features a discussion between Bullock andWangsness, both pharmacists who now consult for plan sponsors, onconsolidation trends and the impact of reduced competition. Bullock alsoinvites employers and other plan sponsors to contact The Burchfield Groupby sending an e-mail to info@burchfieldgroup.com or by calling1-800-778-1359.

About The Burchfield Group

The Burchfield Group is a pharmacy benefit management consultancy based inSt. Paul, Minn. The Burchfield Group brings innovative perspectives tomanaging pharmacy benefits, helping plan sponsors evaluate and selectpharmacy benefit management (PBM) vendors, designing pharmacy benefitplans, monitoring plan and PBM performance, and auditing results. Theirstaff of experts has a vast knowledge of the PBM industry, includinginsight into drug manufacturers' influences, mail service profits, andretail network margins. (www.burchfieldgroup.com)

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