Major insurer picks Amazon Pharmacy over traditional Rx

Blue Shield of California, which serves approximately 12% of California’s population and encompasses California’s Medicare and Medicaid patients, announced they will no longer be partnering with traditional pharmacy chains — including dumping, in part, CVS — in favor of Amazon Pharmacy and others that align with their vision for “more affordable and transparent pharmacy services.”

The move to partner with online pharmacies like Amazon Pharmacy and Mark Cuban’s Cost Plus drugs is part of their Pharmacy Care Reimagined Initiative, which once fully implemented, will save the health plan up to $500 million annually on drug costs alone.

“The current pharmacy system is extremely expensive, enormously complex, completely opaque, and designed to maximize the profit of participants instead of the quality, convenience and cost-effectiveness for consumers,” said Paul Markovich, president and CEO of Blue Shield of California, in the release. “That is why we are working with like-minded partners to create a completely new, more transparent system that gets the right drugs to the right people at the right time at a substantially lower cost.”

This is the second insurer contract for Cost Plus drugs and the sixth for Amazon Pharmacy. The announcement hints at the possibility of other health insurers moving away from traditional pharmacy benefit manager (PBM) models that are currently under scrutiny by lawmakers due to their involvement in driving up drug prices and contributing to the surge in healthcare expenses.

“We’re changing the journey from when a drug is manufactured to when a member receives it. If you’re a pharmaceutical manufacturer, you can feel confident that the final price a customer pays reflects the drug’s true cost and isn’t inflated along the way.” said Sandra Clarke, Executive Vice President, Chief Operating Officer of Blue Shield. “If you are an employer or broker, you’ll make better benefit choices by understanding both the transparent cost and real-world evidence of those products.”

The new pharmacy partnerships will not only provide transparent drug costs but modern retail conveniences that have trickled into healthcare in recent years, like speedy delivery services and 24/7 access to a pharmacist virtually. In addition to partnering with Amazon and Cost Plus Drugs, Blue Shield of California will partner with Abarca, Prime Therapeutics, and CVS Caremark for specialty drugs.

“By simplifying the supply chain, we have lowered cost and improved accessibility, “said Alison Lum, PharmaD, Vice President of Pharmacy Services at Blue Shield of California. “To put it simply, Blue Shield is building something that delivers more value to members and works better for everyone.”