Monday, December 30, 2019

Cigna’s Express Scripts And Big Blue Cross PBM In Major Deal To Tame Drug Costs


Bruce Japsen Senior Contributor Dec 19, 2019, 06:12pm
Cigna’s Express Scripts pharmacy benefit management unit and a PBM owned by 18 Blue Cross and Blue Shield plans have joined forces to tame drug costs for a massive client list that covers 100 million people.
In an announcement Thursday nightExpress Scripts and Prime Therapeutics said their new three-year collaboration is “designed to deliver more affordable care for clients and their members by enhancing pharmacy networks and pharmaceutical manufacturer value.” The collaboration will allow Prime’s member Blue Cross health plans to gain leverage through Express Scripts’ buying clout and large pharmacy network.
The collaboration could put pressure on drug makers that are already under fire for rising prescription costs at a time the pharmaceutical industry is already taking heat and facing bipartisan legislation wending its way through Congress that appears to have the support of the Trump administration. PBMs are the middlemen between drug makers and patients when it comes to purchasing drugs in bulk and leveraging their buying clout to negotiate better discounts for consumers and employers on prescription drugs.
Prime is owned by 18 Blue Cross and Blue Shield Plans, including Florida Blue and Health Care Service Corp., which owns Blues plans in Illinois, Texas, Oklahoma, New Mexico and Montana.  Combined, Prime provides PBM services to more than 28 million people. Meanwhile, Express Scripts said it has more than 3,000 clients and 75 million customer relationships.
“Both companies will continue to work independently with pharmaceutical manufacturers—Express Scripts handling negotiations for drugs on the pharmacy benefit, and each company separately managing certain relationships on the medical benefit and value-based contracting,” the companies said in a joint statement. Financial terms of the collaboration weren’t disclosed.
The deal comes amid an industry shakeup that includes consolidation of PBMs with big health plans. The nation’s second largest health insurer Anthem, which owns 14 Blue Cross and Blue Shield plans, is rolling out its own PBM called IngenioRx. Meanwhile, CVS Health, which owns the Caremark PBM, is gaining market share following its acquisition last year of Aetna, the nation’s third-largest health insurer. And UnitedHealth Group, the nation’s largest health insurer, owns the OptumRx PBM, which is also growing rapidly.
"As health care costs continue to grow at an unsustainable pace, improving the value we deliver in health care is critical,” Prime Therapeutics chief executive Ken Paulus said in a statement Thursday evening. ”This collaboration will improve outcomes while still maintaining flexibility and transparency to the clients we proudly serve.”
Cigna’s Express Scripts said the collaboration “will have an immaterial impact to adjusted income from operations in 2020 with a more positive contribution beginning in 2021.”
"Our agreement reinforces our position as a health services partner of choice for health plans, employers, government and other payers seeking the most value for their investments in health care," Express Scripts president Tim Wentworth said. "This collaboration allows both Prime and Express Scripts to leverage our capabilities to deliver more affordable health care."

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