Anthem Inc (NYSE:ANTM) and CVS Health Corp (NYSE:CVS) are teaming up to create a new pharmacy benefits manager.
Anthem Inc says that it will be creating IngenioRx to act as its new pharmacy benefits manager. This will take place in 2020, which is when the company’s current pharmacy benefits manager contract expires.
Anthem Inc notes that it will be combining its IngenioRx with services from CVS Health Corp starting on Jan. 1, 2020. The agreement will have CVS offering its “expertise in point-of-sale engagement, such as member messaging and Minute Clinic.” The company will also provide customers with prescriptions.
The deal between Anthem Inc and CVS Health Corp will last for five years. In preparation for the change, ANTM is working to make sure that it can easily switch members to the new pharmacy benefits manager in 2020.
“The launch of IngenioRx will allow us to break through what is now a complex and fragmented landscape,” Anthem Inc Chairman, President and CEO Joseph Swedish said in a statement. “It also positions Anthem to take advantage of a unique opportunity to grow and diversify our business within our existing footprint as well as nationally.”
Anthem Inc’s decision to launch its own pharmacy benefits manager with CVS Health Corp is taking place after conflict with Express Scripts. Express Scripts Holding Company (NASDAQ:ESRX) is the current pharmacy benefits manager for the ANTM and its contract expires in 2019.
ANTM stock was up 3% and CVS stock was up 2% as of noon Wednesday. ANTM stock is up 34% year-to-date and CVS stock is down 6% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.