Medco Bets on Pricey Drugs

Over the past two years, giant pharmacy benefit managers have discovered a powerful, but potentially controversial, new way to make money.

The PBMs have taken control of specialty pharmacies that supply some of the most expensive drugs in the world. As a result, some experts say, the long-embattled PBM industry could face a whole new set of conflicts going forward.

PBMs promise to save their clients money by managing their drug benefits for them. However, critics say, the PBMs could start pushing their clients to cover new biotech drugs simply because the high-margin transactions will fatten their own bottom lines. Expensive specialty drugs, used to treat chronic illnesses such as hemophilia and renal failure, often work like miracles but sometimes offer questionable benefits at best. ...