Anthem, Inc. established a new pharmacy benefits manager called IngenioRx in October 2017 and entered into a five-year agreement with CVS Health’s Caremark subsidiary to begin offering PBM solutions.
In January 2019, Anthem terminated the Express Scripts PBM Agreement earlier than the original expiration date of December 31, 2019 due to the recent acquisition of Express Scripts by Cigna Corporation. The ESI PBM Agreement was terminated on March 1, 2019, and the twelve-month transition period to migrate the business began on March 2, 2019. At that time CVS Health is able to begin providing certain PBM services to IngenioRx.
Anthem markets and sells an integrated prescription drug product to both fully-insured and self-funded customers through its health benefit subsidiaries throughout the country. This product includes features such as drug formularies, a pharmacy network, prescription drug database and mail order capabilities.
As part of the CVS PBM Agreement, Anthem will drive clinical and formulary strategy and development, member and employer experiences, operations, sales, marketing, account management, and retail network strategy. Anthem will delegate certain administrative services, including claims processing and prescription fulfillment, to CVS Health.
Anthem plans for IngenioRx to be a more transparent, more customer-friendly business in an industry that has come under criticism from patients and politicians. The new PBM will pass along rebates to customers at the pharmacy counter.
Anthem executives suggested IngenioRx would simplify services for patients and help employers manage the total cost of their workers’ health care. Anthem projects that IngenioRx will eventually provide $4 billion in annual savings and fuel growth across its businesses, with 20 percent of that savings accruing to shareholders.
Anthem plans for IngenioRx to be a platform for the company’s growth by:
- Expanding the share of wallet within the existing medical book
- Leveraging standalone pharmacy opportunities
- Creating new pharmacy partnerships with non-Anthem Blues
In one of the first instances of Anthem’s strategy succeeding, IngenioRx will work with BlueCross BlueShield of North Carolina on a Medicaid contract for patients in the state. The North Carolina plan is not part of Anthem’s network of Blues plans.
Anthem is implementing its roll-out of the new business and interest in IngenioRx is continuing to build as its value proposition becomes more evident to the market. IngenioRx plans to offer the lowest absolute cost for consumers. In 2020, IngenioRx plans to move to providing point of sale rebates and its commercial risk-based business and is prepared to do the same in its Medicare business.
Anthem plans to start the IngenioRx implementation on May 1, but the majority of the membership that transitions in 2019 will be in the second half of the year and does not include all of its Medicare business. Anthem’s individual ACA business is slated to migrate on January 1, 2020.