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Blue Shield of California to Save $500 Million with New Pharmacy Program

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Blue Shield is replacing CVS Caremark with Prime Therapeutics as the company that will negotiate with drug manufacturers beginning in January 2025. The insurer is also teaming up with Mark Cuban Cost Plus Drug Company and Amazon Pharmacy.

Over the next year and half, Blue Shield of California aims to remake its pharmacy benefit model, transforming how prescription drugs are purchased and how members receive their medications. Its new program, Pharmacy Care Reimagined, is expected to save up to $500 million in annual drug costs. Members, the company said, should expect to see lower drug prices when the model is fully implemented in 2025.

Salina Wong

Salina Wong

The savings will come from unbundling pharmacy services, Salina Wong, senior director, Clinical Pharmacy Program, said in an interview. “We want to have greater visibility, and are taking out some of the middlemen that aren’t adding value to what our members need, both from a cost and a quality perspective,” she said. “We will also achieve savings through our new manufacturer contracting process.”

The new model breaks apart the traditional services of a pharmacy benefit manager (PBM) into five different areas. One of the biggest changes is the replacement of CVS Caremark with Prime Therapeutics as the company that will negotiate savings with drug manufacturers to move toward a value-based model that focuses on health outcomes. This change takes place in January 2025.

CVS Caremark will continue to provide specialty pharmacy services for members with complex conditions, including education and high-touch patient support. "We are pleased to continue providing specialty pharmacy services for Blue Shield of California,” a CVS spokesperson said. “Helping customers achieve common goals is one of the many ways we provide value to health plans of all shapes and sizes. We look forward to providing care for Blue Shield of California’s members who require complex, specialty medications – as we have for nearly two decades.”

Blue Shield has also teamed up with Mark Cuban Cost Plus Drug Company and Amazon Pharmacy to provide members with lower cost medications. In addition, Abarca will process prescription drug through its platform, Darwin.

Wong said the strategy for the Pharmacy Care Reimagined began in 2016 when Blue Shield’s President and CEO Paul Markovich began advocating for drug cost transparency. The next year, California established reporting requirements for the list price of prescription drugs sold in the state. Blue Shield also has collaborations with Evio Pharmacy Solutions, Gemini Health, CivicaScript, and Synergie Medication Collective.

“As we continue forward in our journey, we're going to add or refine services,” Wong said.

She said Blue Shield aims to bring pharmacists more into the patient experience. “We want to make sure that pharmacists are engaged and working as part of a more comprehensive healthcare team. Especially in this time when primary care is very strained, we need more practitioners in the mix, especially those who are uniquely qualified to address medication use.”

Blue Shield has already begun to work with a network of pharmacists on this initiative, and Wong said the health plan is already beginning to see benefits with patients who have diabetes. “Ultimately, our goal is to make sure every member has access to a personal pharmacist so that we achieve the health goals that we want to see for our members.”

Pharmacy Care Reimagined is part of the ongoing Health Reimagined strategy, the health plan’s effort to make healthcare more sustainable and affordable. Blue Shield has launched new initiatives as part of this strategy, including a virtual-first plan that integrates primary care, specialty care, and mental and behavioral health; personalized health programs, and mental health programs for students; and community engagement initiatives.

Markovich said in a video on the plan’s website that “Pharmacy Care Reimagined is reimagining a completely broken pharmacy system and turning into one that is affordable, high quality, and centered around our consumer.”

Blue Shield also recently announced a collaboration with Microsoft for a secure cloud system to integrate its data sources. Part of this initiative it to build a new data hub, Experience Cube, which will bring together authorized member, provider and payer data in a consolidated view.

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