What happened?
- On December 19, 2019 Express Scripts and Prime Therapeutics announced a new three-year collaboration that they hope will drive down pharmacy costs for members and clients.
- Express Scripts, acquired by Cigna in December 2018, will provide its retail pharmacy network and negotiate biopharmaceutical contracts for products covered under the pharmacy benefit on behalf of Prime Therapeutics.
- Prime Therapeutics, a PBM collectively owned by 18 Blue Cross and Blue Shield Plans that make up Health Care Service Corporation, will continue to offer all other pharmacy benefit management services to its clients and customers.
- Prime Therapeutics will continue to independently manage its medical benefit management business and all value-based contracts with biopharmaceutical companies.
- All other relationships with members, caregivers, and industry partnerships will also remain independent.
- The financial terms of the agreement have not been disclosed.
So what?
- This collaboration is the latest example of significant industry consolidation of membership and drug purchasing volume that health plans and PBMs are leveraging to negotiate deeper discounts from the biopharmaceutical industry and retail pharmacy networks.
- Prime Therapeutics has struggled in the past to compete with PBMs such as Express Scripts, even for business among Blue Cross and Blue Shield plans.
- Prime Therapeutics is hoping to enhance and leverage Express Scripts’ purchasing power to bring the most competitive prices on retail networks and the core pharmacy benefit business to its clients. This will help Prime Therapeutics avoid client attrition and increase the PBM’s competitive position in the industry.
- Prime Therapeutics will continue to differentiate itself from Express Scripts in specialty pharmacy management, medical management, and value-based contracting capabilities.
- Express Scripts reports that it has now gained an additional 28 million lives to help negotiate deeper discounts from the biopharmaceutical industry and increase volume through their retail pharmacy network.
Now what?
- This collaboration will help Express Scripts maintain contracting leverage after the loss of 23 million Anthem pharmacy lives beginning in 2020. Health Strategies Insights by EVERSANA estimates that Prime Therapeutics represents about 19 million pharmacy lives, the majority of which are ASO (administrative services only) lives.
- Biopharmaceutical companies will need to develop new engagement strategies with Prime Therapeutics based on product portfolio.