Source: Blue Shield of California
Working in conjunction with Blue Shield of California Mark Cuban’s Cost Plus Drug Company And Amazon Pharmacy – breaking away from traditional drugstore chains and partially abandoning the healthcare giant cvs – To save on drug costs for its 4.8 million members.
The CEO of the nonprofit health insurer, which will spend more than $3 billion on member prescriptions in 2022, calls the move a major milestone in its efforts to move toward a value-based model for pharmacy care.
“I expect — when it’s fully ramped up — we’re going to save $500 million a year,” said Paul Markovich, CEO of Blue Shield of California. “So, this is a very significant reduction in cost that we will ultimately, as a nonprofit that limits our income, put back into our premiums.”
health insurer will continue to use cvs caremark Specialty drugs to provide prescriptions and services for patients with complex conditions, but online pharmacies will provide services for the rest.
Shares of CVS fell 7% in premarket trading on Thursday.
amazon pharmacyWhich this week launched a $35-a-month insulin program that will offer upfront pricing, free delivery and round-the-clock access to pharmacists through its online services.
For Cost Plus, which sells drugs at 15% above wholesale prices, California Blue Shield is only the second insurer to sign on with an online pharmacy since its launch in January 2022. Capital Blue Cross, based in Harrisburg, Pennsylvania, with 1 million members signed on with the Cuban venture last fall.
Cost Plus co-founder Cuban said of the challenges of contracting with health insurance plans, often called payers, “It takes time. There are a lot of bad habits they need to quit.”
“I think all payers realize that now Cost Plus has made drug pricing transparent. Providers and patients can see what prices should be, and the entire industry has to adjust,” Cuban said. “besides the big three [health insurers] We will discuss with all other payers.”
The transition to Cost Plus and Amazon for Blue Shield of California will begin in 2024 with its own staff, before being introduced to members, to ensure online pharmacies will have the scale to meet their members’ needs .
“We’re talking about life-saving drugs for people in many cases. So, it’s important to make sure we get it right. And that’s why you need a lot of lead time,” Markovich said.
The health insurer is expected to launch the program for its members in 2025.