National insurer Anthem is launching a pharmacy benefit management company in the wake of breaking up with its long-time PBM, Express Scripts.
Anthem announced early Wednesday that it's partnering with CVS Health to establish the new PBM, which will be called IngenioRx. Starting in 2020, when Anthem's Express Scripts contract ends, IngenioRx will start serving customers of Anthem-affiliated health plans and non-Anthem customers.
Under a five-year agreement, CVS Health will provide prescription fulfillment and claims processing services for the new PBM. Anthem said the partnership combines IngenioRx's member and provider engagement initiatives with CVS' point-of-sale engagement, such as member messaging and Minute Clinic.
"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," Anthem President and CEO Joseph R. Swedish said 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."
PBMs are the behind-the-scenes middlemen that handle prescription drug benefits for self-insured employers and health insurers. They process drug claims and negotiate drug discounts with pharmaceutical companies. They also build networks of pharmacies and help manage formularies.
In April, Express Scripts said that Anthem, its biggest client, would not renew its contract with the PBM after the current agreement expires at the end of 2019. The two had been locked in a feud for more than a year after Anthem claimed Express Scripts withheld billions in savings and overcharged Anthem for its services by $3 billion annually. Anthem sued the PBM for $15 billion last year.