Anthem Inc.’s new pharmacy-benefits manager, IngenioRx, will be a more transparent, more customer-friendly business in an industry that has come under criticism from patients and politicians, executives at the Indianapolis-based health insurer said Thursday.
For example, the new PBM will pass along rebates to customers at the pharmacy counter, the company said during an investor presentation. Critics have said that deep rebates on drugs help keep list prices high, which hurts patients who have to pay cash or a share of a drug’s total cost. Other PBMs have recently moved toward similar practices.
“We are not building a rebate-focused PBM,” Anthem CEO Gail Boudreaux said in a presentation at the company’s investor day Thursday. “We have the benefit and the advantage of building a next-generation PBM.”
Anthem executives suggested Ingenio would simplify services for patients and help employers manage the total cost of their workers’ health care. Anthem projects that IngenioRx will eventually provide $4 billion in annual savings and fuel growth across its businesses, with 20 percent of that savings accruing to shareholders.
IngenioRx is led by Deepti Jain, who joined Anthem in 2014. She previously worked for Cigna’s pharmacy unit and at Medco Health Solutions, which was acquired by Express Scripts in 2012.
PBM clients “have lost faith in the current system and they’re looking for someone who can restore trust and confidence in pharmacy,” Jain said during the investor day.
Pharmacy-benefits managers get rebate payments from drugmakers in exchange for favorably placing medications on PBMs’ lists of covered drugs, called formularies. The secrecy around those arrangements, and exactly where the money from rebates goes, has drawn scrutiny from regulators and lawmakers.
Medicare is pressuring PBMs including CVS Health Corp.’s Caremark unit, Cigna Corp.’s Express Scripts and UnitedHealth Group Inc.’s OptumRx to give the rebates they get from drug companies directly to patients at the pharmacy counter. Lawmakers have proposed legislation that would require a similar change in private health plans.
CVS has offered rebates at the point of sale to employer clients since 2013, said spokeswoman Christine Cramer. Clients receive 98 percent of negotiated rebates, she said. “Drug manufacturers raise list prices over and over again because they can, not because of rebates that PBMs negotiate,” Cramer said in an email.
UnitedHealth declined to comment and Cigna didn’t respond to an inquiry from Bloomberg.
Boudreaux said starting a PBM from scratch rather than trying to “retool old contracts” to fit a new model would be an advantage for Anthem. At the same time, it’s trying to convince existing customers of its health plans to switch to an unproven pharmacy-benefit provider.
Anthem accelerated the launch of IngenioRx in January following a high-profile dispute with Anthem’s previous PBM, Express Scripts.
In one of the first public wins for the new unit, IngenioRx will work with BlueCross BlueShield of North Carolina on a Medicaid contract for patients in the state. The North Carolina plan isn’t part of Anthem’s network of Blues plans.