Following through on a statement Anthem made in April about not renewing its 10-year contract with Express Scripts, the insurer announced last week that it would be launching its own pharmacy benefits manager (PBM) in 2020. CVS Health will service the new PBM, which will be called IngenioRx.
Anthem managed its own pharmacy benefits until 2009, when it sold its in-house PBM to Express Scripts. In January 2016, Anthem CEO Joseph Swedish said Express Scripts owed the insurer an additional $3 billion per year in prescription drugs savings. When Express Scripts disputed the claim, Anthem filed a lawsuit seeking $15 billion in damages. Express Scripts then sued Anthem for violating their agreement. The litigation is ongoing.
IngenioRx will serve members of Anthem’s affiliated plans and will compete with other PBMs for outside business, according to Brian Griffin, president of Anthem’s commercial and specialty business division. After all plan members have been integrated, Anthem expects to save approximately $4 billion annually, Griffin noted. Anthem said it would pass 80 percent of those savings on to customers through pricing, Reuters reported.
In the partnership, Anthem will be responsible for clinical strategies, formulary management and customer experience, while CVS Health handles claims processing and prescription fulfillment. The two companies have signed a five-year agreement.
Reuters reported that Anthem has an estimated 220 million scripts per year worth approximately $23 billion in revenue. Without Anthem’s business, Express Scripts has about 65 million members, according to spokesman Brian Henry. An analyst at Leerink Partners predicted that Express Scripts might try “even more aggressively” to partner with Amazon, should the online retailer decide to start selling prescription drugs.