This news story is also available in Spanish.
by Matt Gibbs, vice president of Pharmacy Transformation, Blue Shield of California
Blue Shield of California is on a mission to create a better healthcare system. One in which high-quality care is affordable, accessible and transparent — a healthcare system worthy of our friends and family. This cannot be done without reimagining pharmacy benefits.
The United States spends more than $400 billion on prescription drugs annually, and most adults take at least one prescription drug each year. With pharmacy costs continuing to escalate at unsustainable levels, we are in dire need of change. As the Pharmacy Transformation lead at Blue Shield, it’s my job to make sure we’re pushing the boundaries. That’s why we set out on our Pharmacy Care Reimagined strategy, a bold, new venture to revolutionize pharmacy care for our members — for good.
What pharmacy transformation means for members, Californians and Americans
As healthcare consumers, we often know who’s involved in our care. We know our doctors, our community pharmacists, our health plan, and sometimes even the companies that manufacture the drugs we take. But it’s the entity we never interact with — the pharmacy benefit manager (PBM) which negotiates the costs of our prescriptions — that has an outsized impact on our care.
Nearly half of Blue Shield’s members access medications through our pharmacy benefits, making it necessary for our team to devise a new solution to provide better care. Across the United States, patients have demanded more transparent and affordable options when it comes to their essential prescription drugs, and California is no different. Since Blue Shield is dedicated to improving the member experience, we enlisted collaborators who would be able to do just that — all with the goal of lowering overall healthcare costs.
What pharmacy transformation means for the healthcare industry, as a whole
Today, a few huge PBMs — shadowy intermediaries owned by massive conglomerates — “serve” over 200 million Americans. As middlemen between drug manufacturers, health plans and pharmacies, they wield significant power. Although they were originally created in the 1960s to lower drug costs, PBMs now frequently increase costs through a mix of questionable business practices, some of which you may have been affected by without knowing. They often push consumers toward more expensive medications, impose significant markups on otherwise affordable drugs, and profit from billions of dollars in hidden fees.
The current system doesn’t serve anyone, except PBMs. That’s the crux of why we announced our big change in August 2023 — Blue Shield of California decided that we had to create an entirely new model of pharmacy care. We could not add duct tape to the old model — we had to develop a radically new approach that ensures the health and well-being of our members.
What pharmacy transformation looks like at Blue Shield
Through our Pharmacy Care Reimagined initiative, we created a first-of-its kind prescription drug model. Rather than supporting one opaque entity determining which drugs you can access and at what cost, we are shining light on the supply chain and working with organizations that are similarly committed to transparency and more appropriate pricing. This new model allows us to set a simple price structure that minimizes drug rebates and hidden fees, making the cost of your medications not only clear, but much more predictable.
I’ve spent the better part of the past decade working to disrupt the traditional pharmacy system, leading two entities that have gone head-to-head with entrenched pharmacy players. In fact, I was working at one of those organizations a year ago when I saw the news that Blue Shield had launched an ambitious and unprecedented initiative to reimagine pharmacy care. The announcement sent shock waves through our industry. With the shared goal of transforming our pharmacy system, I made the decision to get involved.
Blue Shield of California cannot do this alone, and we aren’t. Transformation at this scale takes collaboration with others who share our vision. This is why we’re working alongside industry innovators, like:
- Amazon Pharmacy for fast and reliable prescription delivery
- Abarca Health to pay prescription drug claims quickly
- Navitus Health Solutions to provide management and oversight of our pharmacy retail network
- Prime Therapeutics to negotiate savings with drug manufacturers
- CVS/Specialty for specialty prescription drug network management
- Gemini to deliver state-of-the-art digital tools to our members and providers
- Evio Pharmacy Services to negotiate directly with drug manufacturers for value/outcome-based arrangements
- Synergie Medication Collective to contract for savings related to medications dispensed under the medical benefit
Under this new system, Blue Shield can offer you, our valued member, the pharmacy care experience you deserve:
- Affordable access to life-saving drugs at competitive prices, ensuring that you can afford the medications you require.
- A pharmacy care experience that restores pharmacists as trusted advisors who can provide knowledgeable guidance about your care.
- Convenient access to the medications you need, whether through home delivery or retail pharmacies, without the usual pain points associated with navigating a complex healthcare system.
Currently, we’re on track to launch the full model on January 1, 2025. As we enter the second year of building this transformative model, we can’t help but be excited about the future of pharmacy care. We believe in a system where the priority is your health and well-being, not profit. Together, we’re paving the way for the healthcare system we deserve, including pharmacy care.
Matthew Gibbs, Pharm D, is a pharmacy transformation leader at Blue Shield of California, leading the company’s Pharmacy Care Reimagined strategic efforts and commercialization. With experience as the president of Capital Rx and EnvisionRx, he works on dismantling the vertically integrated PBM model. He has also provided expert testimony for the U.S. Senate Committee on Finance regarding PBM transparency, and served as a leader at Anthem (now Elevance Health), Medco (now Express Scripts) and Walgreens. Follow Gibbs’ insights on LinkedIn here.