Anthem is planning to begin moving members into its new PBM, IngenioRx, in the second quarter of 2019, bumping up the projected launch from 2020.
Anthem announced the change as part of its fourth-quarter earnings (PDF), saying it moved up IngenioRx’s launch because Cigna closed its acquisition of Anthem’s current pharmacy benefit manager, Express Scripts.
Anthem’s contract with Express Scripts will end on March 1, with the yearlong process of migrating members to IngenioRx beginning the next day, it said.
Anthem CEO Gail Boudreaux said on the company’s earnings call Wednesday morning that the accelerated launch is “a key milestone in the realization of our vision and strategy.”
“IngenioRx will improve our ability to integrate the pharmacy benefit into our already strong medical and specialty platform,” Boudreaux said.
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John Gallina, Anthem’s chief financial officer, said on the call that beginning the migration on March 2 positions Anthem to have its members fully moved to IngenioRx by the first quarter of 2020, a full year ahead of previous plans.
Anthem expects to save $4 billion a year by switching to an internal PBM. About 80% of those savings should return to consumers in the form of lower costs, while 20% will be returned to shareholders.
The switch is also likely to create incremental operating growth for 2019 compared to 2018, Gallina said.
Anthem announced plans for IngenioRx in late 2017, and the new PBM will be serviced by CVS Health. Boudreaux said that Anthem and CVS have been working closely over the past 15 months to ensure that the benefit is ready for launch.
Boudreaux said that the two have built a “thoughtful” transition plan for the PBM.
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Prior to announcing plans for IngenioRx, Anthem and Express Scripts had been involved in a public spat, where the payer said the PBM owed it an additional $3 billion each year in drug savings based on their contract agreement.
In addition, Anthem said in its quarterly earnings that its membership increased by 37,000 in the fourth quarter, reaching 39.9 million by the end of 2018. That marks a decline of 361,000 members from December 2017, which Anthem attributed to its decreasing footprint in the Affordable Care Act exchanges.
Operating revenue for the fourth quarter was $23.3 billion, an increase of 3.8% over the fourth quarter of 2017, which reflects premium increases to offset growing healthcare costs.