I believe in the ıtip-of-the-icebergı theory. If you hear a couple people voice the same opinion, lots of others probably think such, too. Hence, there may be some confusion out there regarding the impact of the rift between Walgreen and Express Scripts, and Express Scriptsı proposed purchase of Medco, which the Federal Trade Commission is currently reviewing.

My January 18 article, ıWalgreen-Express Scripts War Could Cut Drug Costs,ı argued that one result of Walgreenıs exit from the pharmacy network of Express Scripts, a large pharmacy-benefits manager, could be lower prescription-drug costs for the PBMıs corporate customers.

The rationale: the nationıs largest pharmacy is now out of Express Scriptsıs network. With that light bulb on, more corporate health-plan sponsors may look at further narrowing, on their own, the number of pharmacies their plan participants can choose from. Depending on how big such a trend became, drug costs could come down as PBMs contract with each of a plan sponsorıs desired pharmacies for lower prescription rates based on the market-share boost the pharmacies would be getting.

Then, it could be anticipated that PBMs would pass on some portion of the savings theyıd realize to their corporate clients.

In response to the article, one reader politely commented: ıWhere the F are you from? Pass the savings on to consumers? Are you serious? Itıs called stock increase and executive bonuses.ı The commenter railed on that if the Medco-Express Scripts transaction goes through, ıthe ıpeopleı wonıt benefit. Itıll be a monopoly that causes more pharmacies to go out of business.ı

While I agree with some of that to some degree, several clarifying points should be made:

ı Should a large portion of the pharmacy market vanish because of a mega-PBMıs emergence, drug prices would indeed shoot up, as the commenter is apparently implying. Respectfully, though, such market carnage seems pretty unlikely. The pharmacy universe, though very large and splintered, is dominated by a number of large players. Walgreen, the largest one presently, has only about a fifth of market share by prescription dollar volume (and still resides in other PBMsı networks). While hometown pharmacies would be at great risk, Wal-Mart, CVS, Rite Aid, and others have extensive location networks and/or mail-in services.

So, even if Express Scripts successfully buys Medco and cuts Walgreen out of that network too, consumers would have plenty of choice in pharmacies. It remains to be seen if the PBM will play quite as hard a ballgame with the other big pharmacy chains, because it wouldnıt want its pharmacy network to get too small.

ı ıPass savings to consumers?ı Absolutely. If anything, when I wrote that having fewer pharmacies in a health plan ıcouldı cut down drug prices, I was being conservative.

Think about it. First, what if a plan sponsor told its PBM that it wanted to give all of its prescription business to just one pharmacy chain? Setting aside the inconvenience they might experience, the participants in that plan would see their drug costs plummet. Having two chains in the network would be cheaper than three, which would be cheaper than four. Plan sponsors get the same effect when they reduce the number of physicians available to participants.

Second, while Iım sympathetic to anyone dismayed by corporate greed, successful companies like Express Scripts arenıt bl