Another health insurer is backing off from the pharmacy benefits management business, saying it hopes to gain bigger discounts and other efficiencies by partnering with a larger PBM, reports the Philadelphia Inquirer.
Independence Blue Cross of Pennsylvania will sell its 4-year-old FutureScripts and Future Scripts Secure PBMs to Catalyst Health Solutions, based in Rockville, Md., in a $225 million deal expected to close later this year. Catalyst then will manage the Blues plans' pharmacy benefits under a 10-year contract.
Many insurers launched in-house PBMs with hopes of benefiting from the integration of medical and pharmacy data. But standalone PBMs have grown more dominant in recent years, Independence Blues executives told the Philadelphia Inquirer. Catalyst's larger size will bring immediate benefits in scale and capabilities that could result in lower prices and better service for members, they said.
The stage was set for more consolidation in the PBM industry with last year's sale of WellPoint's PBM to Express Scripts for $4.7 billion.
Then last month, Aetna announced a 12-year partnership with CVS Caremark, under which CVS will administer Aetna's PBM business. Although Aetna will retain ownership of its PBM, the cost-saving principal is the same: CVS Caremark, with its larger PBM business, might have more leverage to negotiate discounts and obtain other efficiencies. In an analysis of the Aetna deal, a ZDNet blogger said CVS' ability to run the PBM at a lower cost will hinge on whether it can move consumers to lower-cost generics.