Express Scripts Holding Co. grew its second-quarter profit by 21% even though the pharmacy benefit management company filled fewer prescription drug claims for its customers.
Express Scripts, the largest PBM in the country, processed 315.3 million prescription drug claims after adjusting for certain network and home delivery claims in the second quarter this year. That was down 2% from the same period last year and led to a slight dip in overall revenue to $25.2 billion.
Yet the St. Louis-based company's earnings in the quarter rose to $720.7 million from $600.1 million in the second quarter of 2015. Express Scripts cut costs and extracted better discounts from drug manufacturers and pharmacies. The company made a profit of $5.70, before taxes and other financial metrics, for every processed claim in the second quarter, up from $5.59 last year.
PBMs, which manage drug benefits for employers, health insurers and government agencies, make money by negotiating rebates with drug companies, building pharmacy networks and moving patients to generic drugs. Two of Express Scripts' largest customers are Anthem and the U.S. Defense Department. Express Scripts also plays a big role within Medicare Part D.
However, Express Scripts and Anthem are on shaky terms, as each company has sued the other over their drug-pricing agreement. That dispute has led to new lawsuits from shareholders and patients, according to a quarterly securities filing. Many analysts expect the two sides will mutually end their relationship at the end of 2019.
Express Scripts CEO Tim Wentworth said on an earnings call Tuesday that the lawsuits were in the “very early innings,” and his company continues to work with Anthem.
“We're working really effectively with Anthem to help them put in programs that help manage cost and drive their business,” Wentworth said. “We're providing really strong service to them. Our teams are working well together. I don't have anything more to report than that at this point.”