Anthem accelerates launch of PBM IngenioRx
- Anthem is speeding up the debut of its own pharmacy benefit manager to start transitioning clients in the second quarter of this year to the new platform, IngenioRx. The insurance giant will cut ties with Express Scripts earlier than the expected Dec. 31 breakup. The relationship between the two became contentious after a feud over pricing and rebates.
- The Blue Cross Blue Shield payer's fourth quarter earnings per share of $2.44 beat analysts' expectations and Anthem's stock price shot up nearly 10%.
- Anthem reported modest revenue growth for both the fourth quarter and year-end. But net income did fall to $424 million during the fourth quarter from $1.2 billion the prior-year period. Membership fell slightly due to decreased participation in the Affordable Care Act exchange business.
Anthem's move comes as the line between payers and PBMs increasingly morphs.
By moving up the launch of its own PBM unit, the nation's second largest insurer said it will enjoy significant cost savings sooner than expected.
The Indianapolis-based insurance giant of Blue Cross Blue Shield plans said it expects to save $4 billion each year through its IngenioRx PBM. "We have been carefully planning the transition, including the possibility of an early launch, and are confident in our ability to execute the transition under the accelerated schedule," Anthem President and CEO Gail Boudreaux said in a statement. The launch of IngenioRx is nine months ahead of schedule.
She told investors Wednesday during a conference call that Anthem will begin to move some clients to IngenioRx during the second quarter. The Medicare Advantage business won't migrate to the new platform until January 2020.
Boudreaux did not give specifics on the timing for its other clients.
In the pivot to its own platform, Anthem is terminating its contract with Express Scripts early. Cigna's acquisition of Express Scripts allows Anthem to exercise an early termination.
Express Scripts said it was disappointed that Anthem chose to end the contract ahead of schedule. "We know that Anthem cannot offer its clients and members the combination of value, predictability, and clinical expertise that Express Scripts represents," according to a statement provided to Healthcare Dive.
Express Scripts said it will be "complex" to move 14 million people onto a new PBM platform over a 12-month period.
Anthem was Express Scripts' largest client, but the two had a very public falling out beginning in 2016 when Anthem sued Express Scripts, alleging the PBM was overcharging. The court case is ongoing.