Often seen as a clever way to play the coming generic-drug wave, the pharmacy benefits management (PBM) industry has found itself thrust further into the spotlight, thanks to another large customer changing hands and one potentially damaging split.

CalPERS, California's public-employee pension manager, has settled on a new PBM provider after a state investigation discovered potential improprieties with the old provider, Medco Health (NYSE: MHS). CVS Caremark (NYSE: CVS) is the lucky winner, and with it comes 346,000 members who will spend $565 million on drugs annually starting next year. It sounds bigger than it is because of the concessions needed to land the business, but there are ancillary positive effects.

This is the second time in a month that CVS poached a large Medco client, after gaining the Blue Cross Blue Shield Association and its $3 billion of annual revenue at the end of May. Not only does it validate CVS's combined business model, but the loss of these large clients will also potentially weaken Medco's purchasing power, making Medco less competitive going forward.  In fact, if UnitedHealth Group (NYSE: UNH) and Medco go their separate ways in a few months, which is a legitimate concern, then the company will have lost 25% of its 2010 revenue in one year. At least management should know where to find some good antidepressants.

They might not need any medication, but here's hoping Express Scripts (Nasdaq: ESRX) and Walgreen (NYSE: WAG) negotiators resolve their differences before they become permanently irreconcilable. Walgreen says it will be outside the Express Scripts network starting in 2012, claiming that Express Scripts is demanding "unacceptable" reimbursement rates out of line with the rest of the industry. This is probably a case of the theater and public posturing that always go with intense negotiations, but investors should be ready for even the worst outcome. If Walgreen makes good on its threat, it's sacrificing $5.3 billion in annual sales. That's about 7% of its top line, but potentially 20% of its 2012 earnings. For Express Scripts, that means Walgreen's stake of 10% of the total U.S. pharmacy market suddenly disappears. Because the numbers are so large, I have to imagine the sides will reach a compromise before the clock strikes midnight.

David Williamson owns no shares of the companies mentioned. The Motley Fool owns shares of UnitedHealth Group and MedcoHealth Solutions. Motley Fool newsletter services have recommended buying shares of UnitedHealth Group and MedcoHealth Solutions and creating a diagonal call position in UnitedHealth Group. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.