Anthem CEO goes public with Express Scripts partnership dispute

Anthem CEO Joseph Swedish said if Express Scripts — the nation's largest manager of prescription drug benefits — doesn't give Anthem more money in savings, the insurer might look for another pharmacy partner, according to Bloomberg.

"We are entitled to improved pharmaceutical pricing that equates to an annual value capture of more than $3 billion," Mr. Swedish said Jan. 12 at the J.P. Morgan Healthcare Conference. "To be clear, this is the amount by which we would be overpaying for pharmaceuticals on an annual basis." He added much of the savings would be returned to clients.

But Express Scripts disagreed. "Express Scripts has consistently acted in good faith and is in full compliance with the terms of its agreement," said Brian Henry, a company spokesman. "While the contract calls for good faith negotiations regarding a pricing review, it does not mandate specific price adjustments. Furthermore, Anthem is not entitled to $3 billion."

Because Anthem sold its pharmacy benefits business to Express Scripts in 2009, the insurer periodically reviews how much it pays Express Scripts for drugs. The last review occurred in 2012.

In 2014, Anthem made up nearly 14 percent of Express Scripts' $100.9 billion in revenue. After Mr. Swedish's threat on Tuesday, the Express Scripts stock declined to $80.32 — by as much as 6.1 percent — in New York City.

If the insurer does decide to sever ties with Express Scripts, it has a limited number of options for pharmacy partners, including CVS Health and Prime Therapeutics.

Regardless, the two companies "remain in dialogue," according to Thomas Zielinski, Anthem's general counsel.

Express Scripts still has hope for solving the partnership dispute. "I can't think of a time, with any client, where we've had a contractually defined price review where we've reached a point where we couldn't ultimately settle it out," said Express Scripts President Tim Wentworth at the J.P Morgan Healthcare Conference.

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