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Growth Strategies Case Study

Case Title:

Caremark Rx Inc.: Growth through Pharmacy Benefit Managers

Publication Year : 2005

Authors: Nusrath Jahan Maldar, Srinath Manda

Industry: Health Care


Case Code: GRS0059

Teaching Note: Not Available

Structured Assignment: Not Available

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Caremark is the second largest pharmacy benefit management company in the US health care industry. The company was originally established to provide home treatment to seriously ill patients, but eventually, it expanded into the prescription drug management, Physician Practice Management (PPM) and mail order pharmacy businesses. Although initially, Caremark's PPM business achieved a high growth rate, the company was unable to consolidate its success. A turnaround specialist, Edwin Crawford, was appointed to bring the company back to profitability. Crawford divested the PPM business and concentrated on developing Caremark's prescription drug management business.

Pedagogical Objectives:

  • To highlight the growth of Caremark from near bankruptcy to one of the US' leading Pharmacy Benefit Managers
  • To discuss the future of the company in the light of a tighter regulatory environment and growing competitive challenges.

Keywords : Caremark; Pharmacy Benefit Manager (PBM); Physician Practice Management (PPM); Growth strategy; Turnaround; MedPartners; Edwin Crawford; Larry House; Medco; Express scripts; Advance PCS; Pharmaceutical Care Management Association (PCMA); Growth Strategies Case Study; Customer loyalty; Transparency regulations; Unfair Prescription Drug Practices Act

Contents : 
Pharmacy Benefit Managers – Industry Profile
Caremark Rx Inc.-Growth through Pharmacy BenefitManagers
Co-Payment Structures Employed by PBMs
A PBM Business Model
The Cumulative Percent Change in Share Price of Medco
Fortune 500 List of Top Five PBMs
Caremark – Historical Financials & Employees
Medicare, Medicaid and Dual Health Insurance Coverage

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