The much-anticipated launch of Blue Shield of California's drug benefit venture with Amazon Pharmacy and the pharmacy benefit manager Abarca will debut in January, executives involved say.
When the venture was first announced in August of last year, it sent the stocks of the nation's largest managers of pharmacy benefits plummeting when Blue Shield confirmed it was dropping CVS Health's Caremark pharmacy benefit manager (PBM) and going its own way.
In what Blue Shield has called its "Pharmacy Care Reimagined Initiative," the companies involved have said they expect to save "up to $500 million in annual drug costs."
On Wednesday, executives from Abarca and Amazon Pharmacy - key partners among the companies handling Blue Shield of California drug benefits - told attendees at the annual Forbes Healthcare Summit that the new venture will bring more transparency to patients and customers of Blue Shield, which has more than five million health plan members.
"Our benefits translate down to patients," Abarca chief executive Jason Borschow told more than 250 attendees at the Forbes Healthcare Summit at NYU Langone Health in New York. "We don't want any more conflicts."
PBMs are considered middlemen between drug companies and consumers when it comes to purchasing prescription medicines. But the PBM's role has been under fire in recent years as the public, taxpayers and Congress question whether they are passing along as much savings as they should to health plan enrollees.
"We're seeing the regulatory framework change intensely," Borschow said.
Still, given the market clout and scale of the three biggest PBMs and the relationship they have with some of the biggest health insurance companies, analysts have questioned how the new model Blue Shield of California unveiled would grow and gain scale to compete. The market is already dominated by three PBMs that are under the same ownership as large health insurance companies, making it difficult for smaller rivals to gain leverage.
The top three ranked PBMs by "total equivalent prescription claims managed" last year in the U.S. market share were: CVS Health's Caremark PBM (34%); Cigna and Evernorth's Express Scripts PBM (23%) and UnitedHealth Group's OptumRx (22%) according to Drug Channels.
But Abarca and Amazon Pharmacy executives stressed at the Forbes Healthcare Summit that they will be competitive with rivals and customers of the Pharmacy Care Reimagined venture will be satisfied.
"Our collaboration with Blue Shield of California aims to make medication management simpler and more affordable for patients," said Dr. Vin Gupta, chief medical officer of Amazon Pharmacy. "By offering home delivery from Amazon Pharmacy, we're not just saving patients a trip to the pharmacy, we're supporting better health outcomes by making it easier for people to conveniently and consistently take their prescribed medications."