Science News

Pharmaceutical consulting is a relatively new field, so it can sometimes seem nebulous or mysterious to companies and health care payers. This brief history may help shed some light on the role this emerging industry is playing in the health care field.

Health Maintenance Organizations, or HMOs, created somewhat of a path for pharmaceutical consulting firms in the 199's. In order to take more control of the overall prescriptions cost, HMOs began to develop "formularies", or lists of medications that the HMO covered. By using formularies, HMOs highly encouraged physicians to prescribe specific medications over others, while charging consumers more for medications there didn't appear in the formulary.

This method of controlling costs proved effective, but it was also complicated and labor-intensive. As HMOs grew in size and scope, many began to outsource their pharmacy benefit management—or "PBM"—to external pharmaceutical consulting firms.

Soon, this outsourcing to pharmaceutical consulting companies evolved into a two-step process. First, the pharmaceutical consulting firms obtained volume discounts from drug companies for the medications that were covered under the HMO's formulary.

Next, the companies would steer pharmacists and doctors to prescribe medications that were found on the HMO's formulary. According to