- Anthem, which covers 39.9 million people in the US, is starting its own pharmacy benefit manager, IngenioRx, more quickly than expected.
- The huge insurer will end its contract with a pharmacy benefit manager called Express Scripts on March 1 and start transitioning its members over to IngenioRx at the time.
- Anthem’s rival, the health insurer Cigna, acquired Express Scripts in December. Anthem said that’s why it’s moving more quickly to switch over to IngenioRx.
- Anthem and Express Scripts have been locked in a dispute over the terms of their relationship for several years, with Anthem saying Express Scripts was charging it too much for drugs.
A huge health insurer is moving more quickly to cut ties with one of its biggest rivals.
Anthem, which offers health insurance under the Blue Cross and Blue Shield brand in 14 states, said on Wednesday that it would wind down its contract with Express Scripts starting on March 1. Express Scripts helps Anthem manages its prescription drug benefits, and is now owned by the health insurer Cigna.
Anthem and Express Scripts were already set to part ways at the end of 2019, with Anthem launching its own pharmacy benefit manager called IngenioRx. Anthem is working with CVS Health (which owns a health insurer of its own) to build IngenioRx.
Pharmacy benefit managers, or PBMs, help negotiate lower prices for prescription drugs on behalf of health insurance plans and employers. The industry is dominated by three companies: Express Scripts, CVS Caremark, and OptumRx, which is owned by UnitedHealth Group. All are now linked with big health insurers, after Cigna completed its takeover of Express Scripts and CVS Health acquired the insurer Aetna.
Anthem CFO John Gallina said the CVS-Aetna merger shouldn’t have any bearing on CVS’s work on IngenioRx, however.
“Anthem has a dedicated team, CVS has a dedicated team,” Gallina said on a call held to discuss the company’s financial results. “So whatever is going on with their acquisition and other things really are not relevant to our transition.”
Anthem has been clashing with Express Scripts over the cost of prescription drugs for several years, and filed a lawsuit against Express Scripts in 2016. The insurer, which covers 39.9 million people, has said that moving to a PBM of its own will save $US4 billion a year, with shareholders getting about 20% of that benefit.
The stock soared on Tuesday, with Anthem jumping nearly 10 per cent to $US299.40.
“Since announcing our intent to create IngenioRx, we have been carefully planning the transition, including the possibility of an early launch, and are confident in our ability to execute the transition under the accelerated schedule,” Anthem CEO Gail Boudreaux said in an earnings release Wednesday. Anthem said in its earnings call Wednesday that it would give more updates on how IngenioRx factors into its business at its March investor conference.
Analysts cheered on the early launch of IngenioRx.
“CEO Gail Boudreaux is clearly on a roll,” Leerink analyst Ana Gupte wrote in a note Wednesday.
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