Intermountain Health's insurance arm, Select Health, has rolled out a new partnership with Mark Cuban's Cost Plus Drug Co. to its more than 1 million members — a move its chief pharmacy benefits officer said is aimed at eliminating "all the games" in the PBM marketplace.
"We believe there is plenty wrong with the existing pharmacy benefits marketplace and are looking for any way we can to disrupt it." Eric Cannon, PharmD, chief pharmacy benefits officer at Select Health, told Becker's. "Cost Plus has been very consistent with their model and the belief we have that there's too many people in this process taking a piece for themselves. Essentially, how do we eliminate all the games that exist?"
In September, Select Health members gained access to more than 1,000 prescription products through Cost Plus at potentially lower prices that can then be applied toward accumulators such as deductibles or copays. Across the insurer's total population, generic drugs account for 17% of annual pharmaceutical spending, but they make up 90% of prescriptions. Fifty-four percent of the plan's annual drug spending is on specialty medications.
"Generics may only be 17% of our total spend, but we want to put more options in front of members so they have more control over where to get prescriptions filled and how they want to receive them," Dr. Cannon said.
Part of the new flexibility for members will take place through a new partnership between Select Health and Kroger, which are offering a co-branded Medicare Advantage plan for 2024. Kroger is part of Cost Plus Drugs' affiliated retail network of pharmacies, which also includes four other Kroger-owned grocery chains across Select Health's geographic reach in Utah, Idaho, Nevada and Colorado. Cost Plus customers can purchase prescription drugs in-person at affiliated pharmacies, which share similar pricing as the mail-order model.
"If you look at what Cuban has been able to create, Cost Plus has eliminated some of the costs and issues that pharmacies run into with drug wholesalers." Dr. Cannon said. "Our belief is that the more we get to the direct drug cost, the more transparency we can add."
Cost Plus Drugs has launched other insurance partnerships this year, including with Capital Blue Cross and Blue Shield of California.