Federal Employee Program Switches Managers of Specialty Drug Program

Last week, CVS Health announced they will no longer be providing specialty pharmacy services for the Blue Cross Blue Shield Federal Employee Program (FEP) after 2017.

Since the contract expires at the end of 2017, the loss of the contract will not affect this year’s financial results, according to a press release. The contract is projected to generate more than $2.8 billion in 2017, but CVS does not believe that the loss of contract will impact profitability in 2018.

Under separate agreements, CVS will continue to provide pharmacy benefit management (PBM) services to more than 5.4 million federal employees, retirees, and dependents, the press release concluded.

The PBM Prime Therapeutics was chosen to manage the specialty pharmacy benefit for the FEP in place of CVS. Prime will process claims and provide support for FEP members, who fill 400,000 specialty prescriptions annually, according to a press release.

Specialty drugs that treat rare, complex, or chronic diseases currently account for $5 billion in FEP prescription drug spending each year.

The Blue Cross Blue Shield Association (BCBSA) manages the FEP, which is also called the Blue Cross and Blue Shield Service Benefit Plan, according to the release.

“Prime offered the most competitive bid as well as extraordinary care management and member experience capabilities,” said William A. Breskin, senior vice president, government programs for BCBSA.

Currently, Prime serves more than 20 million members through non-profit Blue Cross and Blue Shield plans in 17 states, employers, and government programs.

Prime also recently developed a strategic alliance with Walgreens to improve patient care. Under the alliance, the companies launched AllianceRx Walgreens Prime, which combines specialty central pharmacy and home delivery to provide prescription drugs for all 50 states and the District of Columbia, according to the release.

“Specialty drugs can be life saving, but when they average $300,000 annually, these drugs can be out of reach for many who need them. It’s critical to have a PBM that has a view of total drug cost managment — both medical drug costs and pharmacy costs,” said Jim DuCharme, Prime president and CEO. “I look forward to working with FEP to provide superior coordinated care that helps federal employees, retirees and their families manage these expensive medicines and improve their overall health.”