News & Commentary

Express Scripts, Anthem May Split Up


There’s a sliver of hope that the 10-year contract between the nation’s biggest PBM and one of the biggest health insurance companies might yet be salvaged. Bloomberg News reported that Anthem’s CEO Joseph R. Swedish said last month: “We’ve not made a final decision with respect to any vendor. We’ve not ruled anyone in or out. I think that covers the entire spectrum of vendor possibilities, and I’ll leave it at that.”

There’s certainly some bad blood, as Anthem last year sued Express Scripts for $15 billion, claiming that the PBM overcharged the insurer. A third of Express Scripts’ profits before taxes last year (or $2.25 billion) came from Anthem. The insurer accounted for 18% of Express Scripts’ business in the first quarter of this year.

This on-again, off-again relationship has certainly played havoc with Express Script’s stock. On April 25, when all the signs pointed to a split, Express Scripts’ shares plunged 11%, closing at $60.01. A day later, after Swedish made his comments, the stock gained 2.1% to $61.28, Bloomberg News reports.

Swedish’s comments might be a negotiating ploy. Express Scripts could respond by offering better deals to keep Anthem’s business. But if that fails, “leaving the light on for Express Scripts could also flush out better offers by competitors, such as CVS Health, UnitedHealthcare’s OptumRx unit, and Prime Therapeutics,” Bloomberg News reports.

Express Scripts seems cautiously—very cautiously—optimistic. Spokesman Brian Henry told Bloomberg News in an email that the PBM is “the best long-term partner for Anthem. They have not offered us the RFP as yet and they have been clear, from their conversations to us, they have not been interested in receiving the savings we have offered nor a contract extension.”