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Frequently Asked Questions: Pharmacy Care Reimagined

Updated August 2024

Q: How is Blue Shield of California uniquely positioned to help fix the problems in today’s broken pharmacy system?

  • Pharmacy benefit strategy and expertise: Any decision-making related to benefit design, developing formulary strategy and management, and creating our own clinical and utilization management policies remains with us. Our in-house experts, including pharmacists and physicians, are experienced in direct patient care and will continue to make the decisions that most impact our members. By retaining pharmacy decision-making capabilities where it matters, we are positioned to succeed in this transformation.
  • Flexibility and commitment to do what’s right for our members: As a nonprofit health plan, we can make decisions based on what we believe will improve the health and well-being of our members and all Californians.
  • Confidence that this is the right thing for our business: We believe this will be a competitive advantage. By removing the secrecy around drug pricing and shining a light on hidden prescription costs to make them more affordable, we’re showing that we can change the largest cost of health care challenge our industry faces.
  • Experience with large-scale initiatives: We have an integrated medical-pharmacy approach that leverages the health plan enterprise for large scale projects. This means we can activate resources and experience across Blue Shield, and lean on our experiences from past projects.

Q: Has Blue Shield succeeded in other pharmacy transformations? Are there any previous projects this builds upon?

We have had a leading role in large-scale new innovations in pharmacy since 2017. Blue Shield is committed to pharmacy solutions that can scale, and this is another piece to that puzzle that allows us to build a new model versus tackling each segment/area individually. Some of our existing pharmacy projects include:

  • Policy efforts: In 2017, Blue Shield championed California Senate Bill 17 (S.B. 17), one of the nation’s first drug-pricing transparency laws. The law requires drug manufacturers to inform purchasers in advance of any excessive price increase with an explanation as to why the increase was made.
  • Collaboration with Gemini Health: In April 2018, Blue Shield announced a deal with the tech company Gemini Health LLC to give healthcare providers instant access to a list of low-cost alternative medications that they can prescribe to their patients. As of now, the work has brought $60M of cost savings.
  • CivicaScript Investment: Blue Shield joined with more than a dozen other Blue plans in 2020 to invest a total of $55M in CivicaScript. Together with like-minded manufacturing companies, we are bringing more affordable generic drugs to uncompetitive markets. It is a great example of how Blue Shield is working to bypass inefficiencies and strengthen the drug market to benefit our members and the entire healthcare system.
  • Launching Evio Pharmacy Solutions:  Blue Shield jointly invested, with four other plans, in Evio Pharmacy Solutions, a startup that works with health plans to transform the medication experience for everyone. The company helps its investor health plans by improving medication affordability, patient experience and clinical outcomes. Among other projects, Evio is using real-world evidence and data analytics from real patient experiences to show how individual drugs perform for patients with all different environmental factors and circumstances.

Q: What companies are helping us build the pharmacy supply chain model and what will they do?

We are working with several companies to help us build the new pharmacy supply chain model. These companies will deliver services in the following areas that a traditional Pharmacy Benefits Manager (PBM) might provide, but in a way that addresses the shortcomings of our current system and offers more transparent and sustainably affordable services. Among other companies we may work with, the companies below will be focusing on the key areas outlined here:

  • Abarca will pay prescription drug claims quickly and accurately while continuing to evolve its technology platform, “Darwin,” to support new, simplified payment models.
  • Amazon Pharmacy will provide fast and reliable delivery of prescription medications, at no additional cost, complete with status updates, as well as upfront pricing and 24/7 access to pharmacists. 
  • CVS Caremark Specialty will provide specialty pharmacy services for members with complex conditions, including education and high-touch patient support. 
  • Mark Cuban Cost Plus Drug Company will establish a simple, transparent, and more affordable pricing model, reducing surprise drug costs at the pharmacy pick-up counter. 
  • Navitus Health Solutions will provide management and oversight of our pharmacy retail network, which is comprised of a wide array of convenient retail locations nationwide including grocery, discount and drug stores.
  • Prime Therapeutics will work with Blue Shield to negotiate savings with drug manufacturers to move toward a value-based model that aligns drug prices to patient efficacy and health outcomes.

Q: How will this new model save money?

The services we have contracted for will continue to provide our members with high-quality pharmacy care. The model is rooted in price transparency so that we can identify and eliminate unnecessary or hidden costs.

In the traditional prescription drug supply chain, a Pharmacy Benefit Manager (PBM) provides services in a bundled offering.  We have contracted with companies for individual services, at a lower cost and with greater price transparency in the supply chain. Each company we selected meets our experience and quality requirements for the service they will provide. Our decision to transition away from a traditional pharmacy services model is supported by the improved rates we have secured.