Blue Shield of California Breaks Up Pharmacy Benefit; Other Payers Considering the Same Approach

Employers and health plans are intrigued by the unbundled pharmacy program launched in January by Blue Shield of California, and they say such a program could provide improved financial performance and greater transparency, as well as improved member experience and better outcomes, according to Pharmaceutical Strategies Group’s (PSG) newly released 2025 Trends in Drug Benefit Design report.

Beth Hebert-Silvia, R.Ph.

Some health payers are considering an unbundled approach to pharmacy services in the future, PSG’s survey found. “We’re seeing a concerted effort to take back control of part of the benefit to offer alternatives. It’s all about transparency, flexibility, and control,” Beth Hebert-Silvia, R.Ph., senior vice president and Health Plans Practice Leader at PSG, said during an interview.

Blue Shield of California represents a desire to pay for outcomes because of the pressure to control drug costs. Hebert-Silvia said payers are pressure-testing unbundled pharmacy services as part of their fiduciary responsibility to their organization. Going into next year, she expects to see every variation of different approaches to carving out different functions and services.

“This is about making sure every member at a point in time has access to the cheapest option for their drug. Bringing all those tools and point solutions into place is going to be part of the mainstay because fiduciary responsibility needs to be met,” she said.

Blue Shield of California’s unbundled pharmacy program breaks apart the traditional services of a PBM into five different areas. CVS Caremark was replaced with Prime Therapeutics as its primary PBM with a value-based model that focuses on health outcomes and CVS Caremark providing specialty pharmacy services. 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 drugs through its platform, Darwin.

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

Leaders from Blue Shield of California announced their plan for the pharmacy program in August 2023.

Hebert-Silvia said, however, it’s important not to lose sight of traditional ways to manage drug spend, such as utilization management, care management and disease management, but payers are looking for innovation and new models.

“What’s really important to understand about the Blue Shield of California model is just how dysfunctional the pharmacy pharmacoeconomic supply chain is that we exist in; how we pay manufacturers for drugs and how we reimburse pharmacies to clinically manage our patients has to change in order for us to be sustainable and have affordable health care,” Hebert-Silvia said.

Spotlight on GLP-1 Drugs for Obesity

PSG conducted its survey in February and March 2025 with 222 drug benefit design decision-makers at employers, health plans and unions. Employers made up the largest portion of the sample, about 68%.

The survey also asked respondents about their thoughts on the use of glucagon-like peptide-1 receptor drugs to treat people who are obese. First approved to treat type 2 diabetes, the demand for GLP-1 drugs, such as Wegovy (semaglutide) and Zepbound (tirzepatide), for weight loss is increasing. A PwC survey in October 2024 found that 8% to 10% of Americans are currently taking GLP-1 drugs, and 30% to 35% of Americans are interested in using them.

The use of these drugs is expected to increase as they continue to be studied for other indications, such as cardiovascular, sleep apnea and metabolic dysfunction-associated steatohepatitis (MASH).

In the PSG survey, 9 out of 10 respondents said they covered the GLP-1 drugs for diabetes and 3 in 10 said they covered GLP-1s for obesity. Within the employer group, larger employers were more likely than smaller employers to cover GLP-1s for obesity (51% compared with 23%).

But affordability of the GLP-1 drugs continues to be a concern, with nearly 90% of respondents who were moderately or very concerned about affordability for the plan, a 10% increase compared with last year.

But of those who don’t cover the GLP-1 drugs for obesity, 42% said they would not cover them at any price.

Hebert-Silvia said two factors are driving this. First, she said, “there’s still a fundamental belief that obesity is a lifestyle drug and falls under the nonessential or non-standard benefit design.”

Additionally, Zepbound and Wegovy are now being offered directly to consumers, and questions remain about the price paid by plans. “The problem is that when you’re seeing direct-to-consumer pricing come to market at less than what a health plan pays a drug manufacturer for the same for the same drug, that's a problem,” Hebert-Silvia said. “We still have an upside-down reimbursement strategy when it comes to these drugs. The cash price is an option to access drugs that you may not have coverage for. But why should a cash option be significantly less than what a health plan is paying.”