Pharmacy service providers Express Scripts and Prime Therapeutics launched a three-year partnership to negotiate lower drug costs. The deal would allow Prime to use Express Scripts’ retail pharmacy network and pharmaceutical contracts.
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Combined, the two companies will be able to leverage a large customer base. Express Scripts, the large pharmacy benefit company that Cigna acquired last year, covers more than 75 million customers across 3,000 health plans. Prime Therapeutics, which is owned by 18 Blue Cross and Blue Shield plans, covers 28 million customers across 23 health plans.
Express Scripts President Tim Wentworth said in a news release that the two companies could use their capabilities to deliver more affordable care.
Prime CEO Ken Paulus added the collaboration “…will improve outcomes while still maintaining flexibility and transparency to the clients we proudly serve.”
The two PBMs claimed the partnership would result in more affordable care for clients and plan members, though they did not specify how much it would save them. Express Scripts expects the deal will begin to contribute to its income starting in 2021. Last year, Express Scripts contributed $2.6 billion to Cigna’s pharmacy revenues.
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“How members see savings is a decision that ultimately resides with payers but typically savings are used to control overall premium rates,” Express Scripts Spokeswoman Jennifer Luddy wrote in an emailed statement. “Additionally, once implemented, we do expect some members, especially those in high deductible health plans or with co-insurance, will benefit from lower costs on medicines at their pharmacies.”
Both companies will still negotiate independently with pharmaceutical managers, and the companies will also separately manage relationships related to value-based contracting. Relationships with caregivers, members and other stakeholders will also remain independent.
The news follows heavy consolidation between PBMs and health insurance plans. Cigna closed its $67 billion purchase of Express Scripts at the end of 2018, and a federal judge approved the CVS-Aetna merger in September. Most recently, UnitedHealth Group announced plans for its subsidiary OptumRx to acquire specialty pharmacy company Diplomat for $300 million.
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