Market Overview

PBM Space Gets Cozier With Anthem's New In-House Service, Amazon's Rumored Entrance

PBM Space Gets Cozier With Anthem's New In-House Service, Amazon's Rumored Entrance

Anthem Inc (NYSE: ANTM) announced Wednesday its plans to launch an internal pharmacy-benefit manager at the 2019 expiration of its Express Scripts Holding Company (NASDAQ: ESRX) contract.

The new unit, IngenioRx, will debut in 2020 through CVS Health Corp (NYSE: CVS) and is expected to yield more than $4 billion in annual savings, according to the Wall Street Journal.

Anthem shares spiked 6 percent on the news, and CVS, which locked a five-year contract of undisclosed value, traded up 1 percent off the open. While Express Scripts plunged pre-market, shares eventually recovered.

Express Scripts investors have long been digesting the loss of the firm’s largest client and $17.1 billion in related annual revenue. Management warned in April that the 10-year deal was unlikely to be renewed, as the parties slapped each other with lawsuits regarding overcharges on prescription drugs.

Notably, Anthem had previously operated an in-house PBM but sold the $4.68 billion unit to Express Scripts in 2009.

The partner shakeup rattles an already dynamic PBM landscape. Express Scripts recently announced its acquisition of the privately owned eviCore, and, Inc. (NASDAQ: AMZN) is rumored to be buying its own PBM or partnering with UnitedHealth Group Inc (NYSE: UNH).

Related Link:

Could Pharmacy Benefit Managers Be Trump's Next Target?

Image Credit: Ildar Sagdejev (Specious) - Own work, GFDL, via Wikimedia Commons

Posted-In: eviCore IngenioRx PBM PBMsNews Health Care Media General Best of Benzinga


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