Anthem Ends Relationship with Express Scripts

Anthem searching for new pharmacy benefit manager to take over for Express Scripts in 2020.

Disclosed among Express Scripts’ first-quarter results, the pharmacy benefit manager (PBM) revealed that Anthem is currently searching for another PBM service provider to take over once their contract ends on December 31, 2019.

The insurer is currently engaged in a request for proposal process for a new PBM, and Express Scripts said they are not formally participating in the process, according to a press release.

"It is difficult for us to understand why Anthem has not recognized the potential value which could be brought forth by engaging in meaningful discussions regarding a mutually beneficial pricing arrangement for the remaining term of our contract and beyond," said Tim Wentworth, president and CEO of Express Scripts. "No other party can offer Anthem savings prior to 2020, and no other party can provide updated pricing terms beyond 2019 without the risk and disruption of a lengthy and complicated implementation.”

Recently, Express Scripts proposed providing $1 billion annual value through price concessions for 2017 to 2019 in an attempt to secure a contract extension; however, Anthem intends to seek another provider.

While the conversation has been ongoing, the PBM reported that Anthem plans to move its business when the contract expires. Additionally, Anthem has stated they are not interested in discussing price concessions or accepting the PBM’s proposed pricing for a contract extension, according to the release.

"As our disclosure today clearly demonstrates, Express Scripts makes well below $3 billion annually on the Anthem contract despite Anthem's numerous public pronouncements to the contrary,” Wentworth said. “Anthem's conflicting demands for annual PBM savings, ranging from $700 million in September 2015 to $3 billion in January 2016, its subsequent litigation against us, and now its decision to discontinue discussions altogether do not make any sense to us.

“We just can't explain why Anthem would choose to walk away from an opportunity to realize $1 billion in annual savings, which we have no obligation to provide under our current contract, in exchange for a contract extension at prevailing market rates with a longstanding business partner who has proven its ability to deliver value for their members."

As a result of the insurer’s intentions of moving business elsewhere, Express Scripts provided financial performance metrics both with and without Anthem. Through this, the PBM hopes to demonstrate that its core business is well positioned for growth, even without Anthem, according to the release.

"Express Scripts is committed to fulfilling our obligations to serve patients and Anthem members through the remaining term of the contract and the required one-year transition period, in accordance with our agreement, as well as the successful implementation of any new business added by Anthem over the next 32 months," Wentworth concluded.