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Club Meds

Could drug-buying clubs cure high prescription costs?

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This story appears in the November 2004 issue of Entrepreneur. Subscribe »

Fed up with the high cost of prescription drugs, a group of 50 employers from the Fortune 500 are banding together to negotiate a better deal with pharmaceutical companies. While any effort that chips away at medication costs wins support among most employers, if one company pays less, another will pay more.

"The classic image is of a water balloon," says , practice leader for compensation and benefit consulting at Grant Thornton LLP, a Chicago accounting and consulting firm. "When you squeeze in one place, the water goes to another part of the balloon."

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