Rough Waters Ahead for Pharmacy Benefit Management Companies?

In the following video segment, Motley Fool health-care bureau chief Brenton Flynn continues his discussion of the smaller Catamaran compared with its much larger peers in the pharmacy benefits management space, and notes that scale is one place where the company simply can't compete. But, on a broader note, he talks about a headwind potentially facing the entire industry, one that was initially a bullish point for PBMs -- the growing utilization rate of generics. He points out that eventually, that's going to hit a ceiling, and at that point, the players in this industry are going to have to shift to services to continue creating value.

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The relevant video segment can be found between 9:31 and 11:10.

The article Rough Waters Ahead for Pharmacy Benefit Management Companies? originally appeared on Fool.com.

Brenton Flynn has no position in any stocks mentioned. The Motley Fool recommends and owns Catamaran and Express Scripts. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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