Anthem said its new pharmacy benefit
management company will “produce a total operating gain” of at least $800
million in 2020 with the PBM’s rollout ahead of expectations.
Anthem, which is an operator of Blue Cross and
Blue Shield health plans in 14 states, is rolling out its own new PBM,
IngenioRx, after ending a longtime relationship with Cigna’s Express Scripts
PBM.
Though some of Anthem’s rivals quietly doubted
whether IngenioRx would be ready to go by the beginning of next year, the
health insurer said the PBM will not only be ready for all of its members but a
key factor in earnings growth for 2020 and beyond.
“The migration of our pharmacy business to
IngenioRx continues to go extremely well, and we remain on track to have all of
our members on the IngenioRx platform by January 1, 2020,” Anthem chief
executive Gail Boudreaux told analysts Wednesday on the company’s third-quarter earnings call.
“We're confident in our ability to execute on the remaining aspects of the
transition, and now expect to be in a position to provide value added services
at much more competitive pricing.”
“We continue to expect IngenioRx will produce
total operating gain of at least $800 million, or roughly $2.30 per share in
2020,” Boudreaux said.
PBMs are considered middlemen between drug
companies and consumers when it comes to purchasing prescription medicines. But
the PBM's role has been under fire in recent years as the public, taxpayers and
Congress question whether they are passing along as much savings as they should
to health plan enrollees.
Anthem has vowed more transparency and savings
by owning its own PBM and says it is also attracting health plans and employers
outside of its own health plan offerings to IngenioRX. Already this year,
Anthem landed an external contract for IngenioxRx in Blue Cross of Idaho,
which will begin Jan. 1, 2020. And Boudreaux said there will be others
come on board to IngenioRx.
The rollout of IngenioRx sets the stage for
added competition with health plan rivals like UnitedHealth Group, which owns
its own OptumRx PBM, as well as Cigna, which last year bought Express Scripts,
CVS Health, which owns the Caremark PBM and last year bought Aetna, the
nation’s third-largest health insurer.
Anthem expects the PBM to generate more
profits and cost savings by having it in-house while having the ability to
offer health plan clients a benefit package that melds medical coverage with
prescription benefits. “I think we have a broad array of capabilities, both
through Medicaid but also through our diversified business group,” Boudreaux
told analysts.
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