Diplomat Pharmacy Inc.’s stock value plummeted recently after the company said it would delay the release of its fourth-quarter and full-year earnings results — primarily because of difficulties with its PBM business, AIS Health reported.

Diplomat entered the PBM space in 2017 when it acquired National Pharmaceutical Services and LDI Integrated Pharmacy Services. The company disclosed in a Feb. 22 press release that it anticipates writing down a “significant portion” of its PBM business’ approximately $630 million in assets. It also said it is withdrawing its preliminary 2019 full-year earnings outlook, in part because it’s seen “additional customer losses in its PBM business since early January,” which combined with a “softer outlook for client wins and other factors” has led to a lower-than-expected outlook for its PBM business in 2019.

Asked why Diplomat’s PBM may be losing customers, William Sullivan, principal consultant at Specialty Pharmacy Solutions LLC, says part of the issue may be that pharmaceutical manufacturers are unsure “how things may shake out” regarding the newly proposed changes to the drug-rebate system. That could mean they want to stick with the “big players who will have the most impact on helping steer potential changes,” he says.

Another factor is the consolidation in the PBM industry — with Cigna Corp. now owning Express Scripts, UnitedHealth Group having its PBM OptumRx, and CVS Health Corp. owning both a PBM and health insurer Aetna Inc.

That “gives them even greater purchasing power which, reciprocally, makes it much harder for the smaller players to cut deals that enable them to be competitive with the big guys,” Sullivan says.