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Table of Contents: List of Paper URLs

Section 1: The PBM Business Model (click on titles to download .pdf)

The Market Design for Formulary Positions As  Combinatorial Auction - Forthcoming

Section 2: PBM Rebates and Formularies (click on titles to download .pdf)

The Effect of Corporate Structure on Formulary Design: The Case of Large Insurance Companies      Poster Presentation, ISPOR 10th Annual Meeting, Washington DC, May 2005

Section 3: PBM Policy and Law (click on titles to download .pdf)

Practical Issues With PBM Full Disclosure Laws     Originally Published in FDLI Update Magazine, Issue 4, 2004.

About the author:

I have a B.A. in Economics from Amherst College and a Ph.D in Economics

from Washington University in St. Louis.

I post often on twitter @larrywabrams on issues relating to PBMs, biosimilars

investing in biotech stocks in my portfolio and issues relating to Monterey

County, California where I reside.

My writings are at the intersection of economics, accounting, financial

analysis, and high tech.  I have received no remuneration for these articles

and have no financial relation with any company discussed in these articles.

In 2002, I started looking at the 10-Qs and 10-Ks of the drug store chains and pharmacy benefit managers

after an "aha moment" in a Mountain View CA.  Longs Drug store (later bought out by CVS). 

I had gone there to to pick-up my renewal Rx of Type 2 diabetes drug Glucophage. 


Several things happened that night piqued my interest in PBMs and big drug store chains. 


First, I found out my Rx for Glucophage was now an Rx for Metformin without my prior knowledge. 

I asked the pharmacist what was going on.  He mentioned that my Rx now had a cheaper generic available

and my drug benefit plan manager made the switch automatically.

That night I was also struck by the fact that here was a 12,000 square foot store and all the customers were lined up

at the pharmacy counter in the back.  I asked myself,  "Could it be that hole in the wall in the back generated

all the profits while the front store was just a relic of the bygone days of lunch counters and shopping on Main Street?

The question of relative source of pre-tax profits -- pharmacy vs front store  -- piqued my interest all the more

as I compared the pathetic merchandising I saw in this big drug store chain versus the amazing health product

merchandising I saw a week earlier at the first Whole Foods store on the West Coast in downtown Palo Alto, CA.


Based on that "aha moment", I created an early Wordpress website

to host the following 3 papers that embody that moment: 

Nu-Retail: A Counter to the Web 2002

The Next Tom's of Maine - 2002

Walgreen's Transparency Issue - November 2003

In addition, I was an early adopter of PBM as acronym for pharmacy benefit managers and

I published the first publicly available papers that quantified the PBM business model and retained rebates.

Quantifying Medco's Business Model - April 2005

Estimating the Rebate Retention Rate of Pharmacy Benefit Managers - April 2003


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