Not The Best Prescription For Growth

Whipsawed by health-care reform and pressure on prices, drugmakers Merck, Eli Lilly, and SmithKline Beecham together shelled out $13 billion for independent middlemen to boost drug sales in the last couple of years. But now, with reform dead, the deals for the so-called pharmacy benefit managers (PBMs) look like costly overtreatment. Getting a return on investment "is going to be very difficult," says McKinsey & Co. principal William Huyett. The lesson for drugmakers may be that buying their way toward growth can be misguided.

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