The pharmacy benefits manager Express Scripts will lose its largest client, health insurer Anthem, Inc., when their contract runs out in 2019. Anthem sued Express Scripts in 2016 over claims that it overcharged for its pharmacy services by failing to pass along billions of dollars in savings that it negotiated on drug prices.
Sixteen percent of the prescriptions processed by Express Scripts in 2016 were from Anthem, but this makes up 31% of the company’s earnings before interest, taxes, and other expenses, according to Bloomberg.com. The announcement of this news by Express Scripts caused its stock price to fall by more than 10%.
The announcement of the split came from Express Scripts. “Based on what they communicated to us we felt obligated to make our announcement,” said Brian Henry, spokesperson Express Scripts, told Drug Topics.
Anthem sued Express Scripts last year, claiming that the PBM was overcharging it by $3 billion annually, and asked for $15 billion in damages. Express Scripts countersued and denied the allegations.
“We do not have $3 billion in savings to give Anthem from pricing concessions,” said Tim Wentworth, Express Scripts’ CEO, during a call with investors after the news of the split. “This is the point we’ve made since the figure was first stated by Anthem in January of 2016, at a time when we earned less than $2 billion on Anthem’s business the prior year.”
Express Scripts became the PBM for Anthem in 2009, when it agreed to buy the insurer’s in-house PBM, according to Modernhealthcare.com.
Even without Anthem’s business, Express Scripts will be processing around one billion prescriptions a year for 65 million patients who are with other health insurance companies.
“Our solutions are in demand and our work has never been more important,” Wentworth said, according to Bloomberg. “With or without Anthem, we remain well-positioned for future growth and to lead the way to more affordable access to medicine.”
Drug Topics reached out to Anthem, but has received no response.