Zeneca, in tying up with Salick, won’t in the near term build up sales volumes of its cancer drugs. It’s hoping that Salick’s database will provide product-differentiating information for its pharmaceuticals and let it explore the service business, which, in a capitated system, could increase in profitability as pharmaceuticals shrink. And while Salick's facilities-based approach to cancer treatment means its system will be more difficult to expand than a facilities-independent cancer management system, it could also provide a template for disease management in other therapeutic areas.
Interviewed in London by The Wall Street Journalin August
1994, Zeneca Group CEO David Barnes was paraphrased as
saying about pharmacy benefit management acquisitions by drug firms
that “vertical integration has thus far failed to produce
competitive advantage in any industry where it has been
tried.”
How then to explain its acquisition of Salick Health Care Inc. (SHCI)? Not merely buying a pharmacy benefit manager,...