The Anthem/Express Scripts legal battle now also includes UnitedHealth Group’s Optum, reported Axios.
Anthem is dropping Express Scripts as its pharmacy benefit manager (PBM) and is suing the company for $15 billion because the PBM reportedly reaped “an obscene profit windfall” from drug manufacturers. Those savings were not getting passed onto Anthem. Express Scripts, in turn, countersued stating Anthem did not negotiate in good faith.
The latest legal case, which involves Express Scripts and Optum, deals with a pricing proposal that Optum gave Anthem after the payer requested the information. Anthem approached Optum for the proposal when the payer was contemplating whether to end its contract with Express Scripts.
Express Scripts losing Anthem is a huge deal for the former. Anthem reportedly represents nearly one-fifth of Express Scripts revenue and one-third of its adjusted earnings.
The move is one of the latest twists in the saga involving payers and PBMs. Beyond the Anthem/Express Scripts case, CVS is also in talks to buy Aetna for $66 billion. A CVS/Aetna deal would lead to a company with annual revenue of about $240 billion, which would put it second only to Walmart in the U.S.
Once it drops Express Scripts, Anthem plans to launch a new PBM called IngenioRx with CVS providing prescription fulfillment and claims processing services. Anthem said the program will save about $4 billion annually once it's fully integrated by 2021. CVS recently agreed to offer services to Anthem beginning in 2020.
Meanwhile, Express Scripts is buying eviCore Healthcare for $3.6 billion. EviCore Healthcare works with health plans to lower unnecessary scans and tests. The deal goes beyond the pharmacy benefits business and stretches into working with insurers in the medical benefit management services sector. The company manages medical benefits for 100 million people as well as benefits in categories, such as radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology.
The deal is a way for Express Scripts to expand its offerings to health plans, so it would not only offer prescription benefit services but another way to control healthcare costs.
To complicate things even more in the PBM market, there were rumors that Amazon would jump into the PBM arena. However, Amazon’s recent filings with state pharmaceutical regulators show the company is not looking to sell drugs in its marketplace.