Anthem to Launch Its Own PBM in 2020

Health insurer Anthem has announced that it will launch its own pharmacy benefit management (PBM) company, IngenioRx, that will operate in partnership with CVS Health, in 2020.
Kelly Davio
October 18, 2017
Health insurer Anthem has announced that it will launch its own pharmacy benefit management (PBM) company, IngenioRx, that will operate in partnership with CVS Health, in 2020.

The health insurer has signed a 5-year agreement (commencing in January 2020) to partner with CVS Health, which operates its own PBM under the name Caremark. CVS Health will contribute its experience with point-of-sale engagement, member messaging, and Minute Clinic programs along with prescription fulfillment and claims processing. The new PBM will serve customers whose health plans are affiliated with Anthem, as well as non-Anthem customers.

“During the past two years, we have been very clear that we can strengthen the value offered to the marketplace with an improved and aligned PBM model,” said Joseph R Swedish, chairman, president, and CEO of Anthem, in a statement. “Through the process of evaluating many PBM options in preparation for the expiration of our current contract, we determined that our scale and experience best position us to deliver an innovative solution, and the launch of IngenioRx will allow us to break through what is now a complex and fragmented landscape.”

News of IngenioRx’s development comes as Anthem’s current contract with Express Scripts nears its 2019 expiry. Express Scripts and the insurer have been engaged in a high-profile dispute over PBM services for some time. In 2016, Anthem sued Express Scripts for $15 billion and the option to terminate its contract over claims that Express Scripts had failed to pass along savings from drug-pricing negotiations. According to the PBM’s financial data, Express Scripts netted $17.1 billion in revenue from Anthem in 2016.

With the launch of IngenioRx, Anthem will gain control over its clinical and formulary decisions, and will negotiate its own rebates with drug manufacturers. That scenario has the potential to provide greater transparency concerning the costs of prescription drugs to both Anthem-run health plans and to employers.

Greater insight into the costs of drugs would be welcome news to many stakeholder groups; Angus Worthing, MD, a practicing rheumatologist and chair of the American College of Rheumatology’s Government Affairs Committee, recently wrote in an opinion piece in The Center for Biosimilars® that a lack of transparency surrounding PBMs’ rebate negotiations can hamper competition, especially with respect to biosimilars and biologics: “PBMs pressure drug makers to grant them high rebates in exchange for a favorable position on their list of approved drugs. This rebate system is destructive to the biosimilars market, hinders patient care, and costs consumers billions,” Worthing said. “The medical community must come together to demand greater transparency in drug pricing, starting with PBMs.”

PBMs have also come under fire for the practice of administering direct and indirect remuneration (DIR) fees, which some claim could drive up drug prices for Medicare Part D beneficiaries and taxpayers. A whitepaper produced by the law firm Frier Levitt, LLC for the Community Oncology Alliance (COA) claimed that, while DIR fees began as a strategy to encourage drug price transparency, “DIR fees have been twisted by PBMs into an abusive and overly-broad ‘backdoor’ vehicle for clawing back additional monies and increasing their own profits.”

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