Express Scripts shrugs off Amazon threat in pharmacy benefits
(Reuters) – Express Scripts Holding Co said on Wednesday it would “stand well” against any possible competition from Amazon.Com in the pharmacy benefit management business, allaying investor concerns.
The company’s shares were up 4 percent at $61.22 in early trading.
Express Scripts, the biggest pharmacy benefit manager (PBM)in the United States, along with drug distributors have been under pressure by the rumored entry of Amazon into the prescription drug market. [nL2N1MH1J1]
“I feel very confident we’ll stand well against an entry in the PBM space, be it Amazon or anybody,” Express Scripts Chief Executive Timothy Wentworth said on a conference call.
PBMs negotiate drug benefits for health insurance plans and employers, and have in recent years taken an increasingly aggressive stance in price negotiations with drugmakers.
They often extract discounts and after-market rebates from drugmakers in exchange for including their medicines in PBM formularies with low co-payments.
Express Scripts, which reported lower-than-expected quarterly revenue on Tuesday, named James Havel as the chief financial officer and said it aims to retain more customers in 2018. [nL4N1MZ5QV]
The company’s efforts to retain customers comes a week after its biggest client and health insurer Anthem Inc ended a 10-year contract with the company to launch its own pharmacy business.
Wentworth said Anthem’s announcement, while disappointing and perplexing, was not surprising. “With Anthem’s decision, obviously, it gives us a bit of a clear line of sight to some of the work we have to do.”
(Reporting by Ankur Banerjee in Bengaluru; Editing by Supriya Kurane)