CVS Health Corporation focuses on the procurement of health care services. The company operates through different segments: Pharmacy Services, Retail or Long Term Care, and Corporate. The Pharmacy Services division provides PBM or pharmacy benefit management solutions. The Retail or Long Term Care division consist of selling prescription drugs and assortment of general merchandise. The Corporate division involves in providing management and administrative services (Fein, 2010). The fusion in 2007 of CVS largest retail pharmacy chain in America and Caremark Rx, originated a preeminent pharmacy health care provider in the USA. CVS Caremark is a leader in the pharmaceutical services industry (Fein, 2010). A PBM or pharmacy benefit management is a third party controller of prescription drug programs for commercial health plans, public worker’s health benefits program in the US, and self-insured employer. The industry’s main activities are processing and paying prescription drug claims, managing prescription drug plan costs and prescription drug plan design and administration. The pharmaceutical industry is expanding …show more content…
Significant acquisition and fusion activity has been the predominant strategy for the top companies in the PBM industry to expand their market share. In general, increasing total health expenditure and prescription drug use drove the demand for industry service during the previous years (Fong, 2018). Furthermore, the patent of exclusivity of specific brand-named drugs were lost, providing consumers with more access to lower-priced common-generic drugs. Industry revenue is forecast to grow in the next five-year period to 2023 (Fong, 2018). Although, Pharmacy Benefit Management companies will have to resist price pressures from insures, as they try to keep prescription prices low, reducing industry revenue growth (Fong,