Express Scripts Holding Co. shares rose Wednesday after health insurer Anthem Inc., its biggest client, said it hasn’t ruled out using the pharmacy benefit manager after their contract expires.
The stock was up 3.2 percent, to $61.93 per share, Wednesday morning after falling more than 7 percent on Tuesday.
Express Scripts said earlier this week that it expected Anthem wouldn’t renew their contract, sending the PBM’s shares plunging. Anthem’s comments Wednesday appeared to suggest there was still a possibility.
“We’ve not made a final decision with respect to any vendor,” Anthem Chief Executive Joe Swedish said on the company’s quarterly earnings call. “We’ve not ruled anyone in or out. I think that covers the entire spectrum of vendor possibilities and I’ll leave it at that.”
The two companies have been locked in argument over what Express Scripts charges the health insurer to administer prescription drugs. Anthem has said it’s paying $3 billion a year too much, and the companies have sued each other. The situation came to a head this week when Express Scripts said it couldn’t produce those savings and that Anthem “intends to move its business when the company’s current contract with Anthem expires.”
“We’re moving on. That’s the message you should get from today,” Express Scripts CEO Tim Wentworth said Tuesday.
Except maybe they aren’t.
“We have said all along that we are the best long-term partner for Anthem,” said Brian Henry, a spokesman for Express Scripts. “It is also true that they have not offered us the RFP as yet and they have been clear, from their conversations to us, they have not been interested in receiving the savings we have offered nor a contract extension. That’s what we said yesterday.”
There are only a handful of other big pharmacy benefit managers that Anthem could turn to in the highly consolidated industry. One, OptumRx, is owned by one of Anthem’s major insurance rivals, UnitedHealth Group Inc. Other top players are CVS Health Corp. and Prime Therapeutics LLC, which manages drug benefits for not-for-profit Blue Cross and Blue Shield plans in many states.
Swedish said on the call that the $3 billion number wasn’t negotiable.
“We really have not changed our position,” he said. “We are hopeful that we can resolve our dispute.”