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Who Wins in the PlanetRx and Express Scripts Deal?
Complex business deals are hard even for reporters to figure out.
First the facts: PlanetRx is an online pharmacy at PlanetRx.com.
Express Scripts is a pharmacy benefit manager, or PBM, a liaison
between insured customers and pharmacies. Express Scripts had an
online pharmacy, YourPharmacy.com, until it dealt it away to PlanetRx.
CNET came in early with a short piece on the deal, making it sound
like a win for PlanetRx. First, seeing the world through
dot-com-colored glasses, CNET ran a headline and lead that didn't
mention Express Scripts at all. PlanetRx is "expanding its clout,"
said CNET staff writer Kim Girard, who focused on PlanetRx becoming
the online pharmacy for Express Scripts' 36 million members. She did
mention that PlanetRx has to pay Express Scripts around $11 million
per year in fees, and that Express Scripts gets a 19.9 percent stake
in PlanetRx after its IPO. Then Girard went back to cheering for
PlanetRx, who gets Express Scripts' YourPharmacy.com plus Express
Scripts' help wheeling and dealing with pharmaceutical companies.
In a more balanced report, the Wall Street Journal put the emphasis on
what it saw as a direct trade: Express Scripts handed over
YourPharmacy.com in exchange for 19.9 percent of PlanetRx. They also
said PlanetRx "will provide additional financial support for the
further development of Express Scripts' Internet capabilities for five
years," and that Express Scripts will use some of that $11 million to
pitch the Internet to its customers and develop PBM-related Web
content. In other words, WJS made the deal look fair for both parties,
rather than showing Express Scripts getting taken for a ride.
The WSJ scored with comparisons to Drugstore.com's and Soma.com's
recent deals with big, chain drugstores. Without the cooperation of
PBMs, online-only drugstores can't offer insurance reimbursements, so
insured customers have to pay full price. Maybe it really does take
two to tango.
Express Scripts Agrees to Transfer Assets of Web Pharmacy to PlanetRx
interactive.wsj.com
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PlanetRx Seals Deal for More Net Customers
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