Anthem, which has been locked in a public feud with Express Scripts for months, announced Wednesday that it will launch its own pharmacy benefits manager (PBM) serviced by CVS Health.
The new entity, IngenioRx, will offer “a full suite of PBM solutions” beginning in 2020, when Anthem’s contract with Express Scripts expires, according to an announcement.
It will serve members of Anthem’s affiliated plans as well as compete with other PBMs for national accounts and other health plan business, Brian Griffin, president of Anthem’s commercial and specialty business division, said on a conference call Wednesday morning. Anthem will integrate all its members into the new PBM by 2021.
The insurer expects its new PBM will result in an estimated $4 billion in pharmacy savings per year once fully integrated, Griffin added.
Anthem has been clear about its intention to find a new PBM arrangement since CEO Joseph Swedish said in January 2016 that Express Scripts owed it $3 billion more per year in prescription drug savings due to a repricing provision in their contract—a claim the PBM disputed. Anthem then upped the ante by suing Express Scripts for damages, and the PBM countered by suing Anthem for violating the terms of their contract.
Swedish said during Wednesday’s call that the litigation between the two companies is ongoing, and has "little ties" to Anthem’s new PBM arrangement. Still, the insurer’s decision was likely not a surprise to Express Scripts, as it previously told investors that it does not expect Anthem to renew its PBM contract once it expires.
“We are excited about the opportunity to build a game-changer in the PBM arena,” Swedish said. “We believe with IngenioRx we will be able to create a differentiated solution in the marketplace that will resonate with consumers.”
One key differentiator will be the ability to better integrate medical and pharmacy services, according to Griffin. The new PBM aims to lower total healthcare costs by aligning incentives across the value chain, and ensure a seamless, coordinated member experience by leveraging strength of Anthem’s provider relationships, he said.
Anthem’s relationship with CVS takes a sort of “hybrid” approach to pharmacy benefits management, as the insurer is neither building its own PBM from scratch nor totally handing the reins over to a vendor, Swedish said. Anthem’s role in the partnership will be to focus on clinical strategies, formulary management and customer experience, while CVS will handle claims processing and fulfillment.
The result, Swedish said, will be a PBM that aims to “resolve consumer frustration” with a business model that is too complex and opaque. Indeed, PBMs are facing increased scrutiny from payers, pharmaceutical companies and the public at large amid the debate over skyrocketing drug prices.