Bruce Japsen Senior Contributor Oct 17, 2019,7:14 am
A sign sits at the
Walgreen’s pharmacy in New[+]
BLOOMBERG NEWS
Walgreens Boots Alliance, Centene and the
pharmacy benefit manager RxAdvance Thursday said they are
partnering to increase transparency and reduce costs through a cloud-based
pharmacy benefit platform.
Centene last year bought a stake in RxAdvance,
a cloud-based pharmacy benefit manager that is trying to tap into the rapidly
consolidating and changing PBM industry. Now Walgreens, which doesn’t own a
PBM, said the drugstore chain will also invest a stake in RxAdvance and build
on its partnership with Centene, a health insurance company that is working its
way through an acquisition of WellCare Health Plans to administer health
coverage across the U.S.
“Using RxAdvance’s collaborative PBM cloud
transactional platform and clinical intelligence, the companies will work
together to improve overall patient care across the continuum of health care
and to offer such a model to other large payers,” the companies said in a joint statement Thursday.
The partnership includes an investment by
Walgreens into RxAdvance that Walgreens executives described as “small.”
Additional financial terms of the partnership weren’t disclosed.
The investments come as health insurance
companies are buying or forming closer ties with PBMs via acquisitions designed
in part to increase transparency as well as meld drug coverage and medical
benefits together in the same package for their customers.
Cigna last year bought the PBM Express Scripts
while Aetna, the nation’s third largest health insurer, merged with Walgreens’
chief rival drugstore chain, CVS Health, which owns the Caremark PBM.
Meanwhile, UnitedHealth Group owns the OptumRx pharmacy benefit manager and
Anthem is rolling out its own PBM, IngenioRx.
“Collaboration between retail pharmacies and
payers like Centene can further transform the way we provide care,” said
Walgreens CEO Stefano Pessina. “Using RxAdvance’s collaborative PBM cloud, our
partnership can empower our pharmacists to make critical decisions at the point
of sale to help improve adherence and also to reduce avoidable medical costs.”
Centene is perhaps best known for providing
subsidized private individual coverage under the Affordable Care Act. Centene
also administers Medicaid benefits for several states and is beginning to
expand into Medicare Advantage, health coverage seniors buy from private
insurers that have contracts with the federal government.
In RxAdvance, Walgreens is taking a bet on the
future as Centene has already done with an investment stake the insurer made
in the PBM last year. Centene Thursday said it has “increased its stake in
RxAdvance, following its initial investment announced in March 2018.”
The investments are a potential boon for
RxAdvance. RxAdvance, run by executives that include former Apple chief executive John Sculley, bills
itself as a full-service PBM. Sculley is RxAdvance’s chairman.
“By pushing the limits of innovative
technology and existing transaction standards, there is a clear path forward to
reduce administrative costs, avoidable medical costs, and to improve overall
quality of care,” said RxAdvance founder and CEO, Ravi Ika.
Centene executives have said they see
RxAdvance as a next-generation solution to rising drug costs and the health
insurer has gradually been moving its health plan enrollees to the new
platform. The shift to RxAdvance by Centene, which already owns its own PBM
known as Envolve Pharmacy Solutions, came
as Congress called for more transparency while investigating the PBM’s role as
a middleman between drug makers and consumers and its share of rebates
— the portion of the drug returned by the seller to the buyer.
“Centene is committed to supporting a
transparent pharmacy benefit management model that is sustainable with higher
quality care for members at a lower cost to our customers,” Centene chairman
and CEO Michael Neidorff said. “This new approach to pharmacy management will
improve the transparency and quality of care, while reducing unnecessary
medical costs for millions of people.”
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