Fight over high-cost drugs to intensify after Catamaran deal

"It definitely helps to negotiate down pharma prices, for sure," said Steve Halper, an analyst at FBR & Co. "You're negotiating with the manufacturers for rebates and pricing with a much larger base.

Express Scripts rose 3.7 percent to $85.41 at the close in New York. CVS gained 1.3 percent and UnitedHealth was up 2.5 percent.

Pharmacy managers have been willing to use those large volumes of patients to negotiate with drugmakers. Express Scripts ignited a price war for hepatitis C drugs last year when it excluded from coverage Gilead Sciences Inc.'s new drug that cost more than $1,000 a day. Instead, Express Scripts picked a competing medicine from AbbVie Inc. in return for significant discounts. Gilead struck its own agreements with CVS in exchange for price concessions.

Next targets

The next target for pharmacy benefit managers may be a new class of powerful cholesterol drugs expected to come to market this summer and cost as much as $12,000 a year. Also on pharmacy benefit managers' lists are new psoriasis medicines that are likely to cost more than $30,000 a year, and $150,000-a-year cancer drugs that trigger the immune system to fight deadly lung and skin tumors.

''When these competing therapies come out, that is your negotiating leverage point" to get better discounts, said Jim Yocum, executive vice president of DRX, a unit of Connecture Inc. (Nasdaq:CNXR) that provides comparison software for health plans. Part of the deal rationale "may be the need to get big to negotiate."

Pharmacy benefit managers will also look for savings from "biosimilar" versions of expensive biotechnology drugs. A version of Amgen Inc.'s Neupogen drug made by Novartis A.G. won U.S. government approval early this month, the first biosimilar to be approved in the U.S.