Prime Therapeutics Wins Pharmacy-Benefit Customer From CVS
06/14/2012| 02:30pm US/Eastern
By Jon Kamp
The largest health insurer in New Jersey is planning to switch its pharmacy-benefit business for 1.1 million non-Medicare members to privately held Prime Therapeutics LLC and away from CVS Caremark Corp. (>> CVS Caremark Corporation) next spring.
Horizon Healthcare Services Inc., a nonprofit with 3.6 million customers overall, will start working with Prime, also a nonprofit that is owned by several Blue Cross and Blue Shield plans, on April 1, 2013.
Prime highlighted the change in a press release Thursday, in which it said it won the business after an "extensive proposal process." The company touted its ability to provide "the lowest net-cost," among other services. It declined comment on whether it also may take on Horizon's Medicare customer base in the future.
Pharmacy-benefit managers, known as PBMs, manage drug-benefit programs for health plans and corporate customers. They use their buying power to help secure rebates from drug manufacturers and also push use of generic drugs, which tend to deliver higher profit margins for PBMs, when possible.
The customer switch between Prime and CVS may wind up being just one of many once the dust settles from an ongoing and busy selling season for PBM services. Prime and CVS are among the industry's biggest firms.
The market has been shaken up by consolidation and the fractured relationship between Express Scripts Holding Co. (ESRX)--the biggest PBM following its purchase of Medco Health Solutions earlier this year--and drugstore operator Walgreen Co. (WAG). Consultants who help clients pick PBM services say many customers are testing the waters in the changing market by sending out requests for proposals.
CVS shares were up 1.2% to $45.74 in recent trading Thursday.
Write to Jon Kamp at email@example.com