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The Drug industry and the pharmacy benefit management companies (PBMs) in 1995

Author: Cool, Karel O. INSEAD Area: StrategyPublisher: Fontainebleau : INSEAD, 1995.Language: EnglishDescription: 11 p.Type of document: INSEAD CaseAbstract: The case briefly describes the economics of the pharmaceutical industry, the distribution of drugs in the US (and Europe) and events concerning the acquisition by pharmaceutical companies of pharmacy benefit management (PBM) companies.Pedagogical Objectives: The case focuses on motive for vertical integration, the use of "raising rivals' costs" as a strategic weapon, and the impact of regulation on the competitive advantage of firms.
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The case focuses on motive for vertical integration, the use of "raising rivals' costs" as a strategic weapon, and the impact of regulation on the competitive advantage of firms.

The case briefly describes the economics of the pharmaceutical industry, the distribution of drugs in the US (and Europe) and events concerning the acquisition by pharmaceutical companies of pharmacy benefit management (PBM) companies.

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