by Leslie Small
Major PBM Express Scripts is teaming up with Prime Therapeutics,
a PBM owned by 18 Blue Cross and Blue Shield plans, in a deal that one analyst
says should silence concerns that Express Scripts might lose health plan
customers after being acquired by Cigna Corp.
Under the three-year agreement, Express Scripts "will
provide services to Prime related to retail pharmacy network and pharmaceutical
manufacturer contracts," the companies said in a Dec. 19 press release.
That means Express Scripts will now negotiate with pharmaceutical manufacturers
on behalf of Prime’s 28 million members for drugs covered on the pharmacy
benefit, in addition to its own 75 million customers.
That arrangement will let Prime "essentially add to and tap
into the purchasing power/scale of Express, ultimately allowing for greater
rebates from manufacturers," Citi Research analyst Ralph Giacobbe wrote in
a Dec. 20 note to investors. The collaboration, he said, "represents a
transparent…pass-through model as rebates are fully passed on to Prime,"
while Prime can also tap into Express Scripts' retail network, contracting with
Cigna and collecting a fee for its services.
However, each company will continue to separately manage
"certain relationships on the medical benefit" and value-based contracting,
the press release said. The firms' "other relationships with members,
caregivers and key stakeholders" will also remain independent.
"While there are some financial benefits, we view this as a
significant favorable development for Cigna and most important for sentiment as
[Cigna's] ability to retain health plan clients has certainly come into
question following its combination with [Express Scripts], despite strong
retention figures," Giacobbe advised. "The announcement is clearly an
indication of a large sophisticated customer acknowledging the value and
benefit of partnering with [Cigna/Express Scripts]."
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