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Perspectives on PBM Performance Amid COVID-19

Posted by Leslie Small on Sep 17, 2020


For PBMs, 2020 has been far from business as usual, given the myriad ways the COVID-19 pandemic has changed how people interact with the health care system. However, during their second-quarter earnings conference calls, companies that own some of the largest PBMs emphasized that they are largely satisfied with how the PBM segments of their businesses are performing, AIS Health reported.

Anthem, Inc. Chief Financial Officer John Gallina said during the insurer's earnings call that "IngenioRx is actually doing quite well, and has really done a nice job of meeting our expectations."
Anthem is on track this year to realize $900 million in operating profit contributed from its relatively new PBM, which exceeds its prior expectation of $800 million, Credit Suisse analyst A.J. Rice pointed out in a July 29 note to investors. But he also noted that while maintenance prescription volume was steady compared with the prior-year quarter, "new scripts saw a 10-15% drop in April versus normal utilization. Thus, IngenioRx captured less profit in Q2."

CVS Health Corp., which owns the PBM Caremark, reported that operating income and adjusted operating income for its pharmacy services segment increased 6.2% and 2.4%, respectively, from the prior-year quarter. Those results were "primarily driven by growth in specialty pharmacy and improved purchasing economics," but they were offset by "continued price compression and previously disclosed client losses," the company said in its earnings release.

Cigna Corp. reported on July 30 that for its health services segment — which houses the PBM Express Scripts — pretax adjusted income from operations increased 7% relative to the second quarter of 2019.

Executives from Anthem, Cigna and CVS all acknowledged that the PBM selling season for 2021 was affected by the shutdowns and economic uncertainty ushered in by the COVID-19 pandemic.

Anthem President and CEO Gail Boudreaux described the selling season as "an interesting operating environment, given all the change." As the insurer mentioned in its first-quarter earnings call, "things are, I would say, at least slightly delayed, as customers try to work through their own stability across their business," Boudreaux said.

Alan Lotvin, M.D., the executive vice president and president of Caremark, offered: "I'd say the season itself has been interesting in the lumpiness with COVID, but overall ending up about where we thought."

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Topics: Industry Trends, Data & Analytics, Provider, Payer