A CVS location in New York, US, on Thursday, Feb. 9, 2023.
Stephanie Keith | Bloomberg | Getty Images
Shares of CVS Health plunged 9% on Thursday after Blue Shield of California mentioned it would drop the company’s pharmacy profit administration providers and as a substitute partner with Mark Cuban’s Cost Plus Drug Company and Amazon Pharmacy to save on drug costs for its almost 5 million members.
The announcement hints on the potential for well being insurers to abandon the normal PBM system and despatched shares of different firms that supply PBM providers decrease.
Cigna and UnitedHealth Group dropped about 7% and 1%, respectively.
PBMs preserve lists of medication lined by medical health insurance plans and negotiate drug reductions with producers. But they’ve not too long ago come beneath scrutiny from lawmakers for his or her function in inflating drug costs and inflicting healthcare costs to skyrocket.
CVS Health’s Caremark has been Blue Shield’s PBM associate for greater than 15 years.
Blue Shield will now work with 5 completely different firms to present “handy, clear entry to drugs whereas decreasing costs.”
Blue Shield CEO Paul Markovich mentioned the plan, which is slated to totally launch in 2025, might save the corporate up to $500 million yearly.
Amazon Pharmacy will supply at-home drug supply. Cuban’s Cost Plus Drug Company will present entry to low-cost drugs via retail pharmacies. Another firm, Abarca Health. will course of drug claims.
Blue Shield will retain CVS Caremark for its specialty pharmacy providers, which give specialised therapies and counseling to sufferers affected by complicated issues.
“We look ahead to offering take care of Blue Shield of California’s members who require complicated, specialty drugs – as now we have for almost twenty years,” mentioned Michael DeAngelis, a spokesman for CVS Health, in an announcement to CNBC.
Still, the loss of Blue Shield’s PBM partnership is one other blow to Caremark, which can be set to lose one other contract with Centene subsequent yr.