ST. LOUIS, MISSOURI
Health Insurance giant Anthem, Inc., announced its intentions to split from pharmacy benefits manager Express Scripts Holding Company at the end of its contract in 2019. As a PBM, Express Scripts’ role is to serve patients by negotiating drug prices and selecting the most cost-effective products when equivalent drugs are on the market. PBM’s make money from spread pricing, a differential introduced between what they pay pharmacies and bill insurance companies; taking cuts from rebates; and charging administrative fees. Express Scripts is one of only three big PBM’s, the other two being CVS Caremark and OptumRx. If Anthem, which accounts for 17 percent of Express Scripts’ revenue, were to give its business to CVS, the PBM’s would trade places as first and second largest. The split follows a lawsuit in which Anthem claimed Express Scripts overcharged it $15 billion over five years. Express Scripts CEO Tim Wentworth countered Anthem had a special deal with his company that included a $4.7 billion upfront bailout.