Health and Science

Express Scripts looks for retail partners to reduce diabetes costs

Getty Images

Express Scripts is looking to partner with retail pharmacies that do the best job at keeping diabetes patients healthy, as part of a new effort to help large employers hold down costs for the disease by helping patients achieve better health outcomes.

"Right now, people don't differentiate and don't prefer retailers based on their quality, it's usually just a cost equation," said Dr. Steve Miller, Express Scripts chief medical officer. "We think this is going to be huge in the marketplace, because you're going to be able to get millions of patients higher quality care and lower cost on diabetes."

On guard for malware

Cusomers get information from a reception desk at a UnitedHealthcare store
UnitedHealth's Obamacare exchange exit strategy
Insurance deals win over states, but Feds still in doubt

Miller unveiled the plan at Express Scripts' annual client conference in Florida, the same conference where he first previewed taking a tough stance against Gilead Science's high-priced hepatitis C drug Sovaldi in order to secure better pricing on a competitor's hepatitis drug.

The move is a departure for the nation's largest pharmacy benefits management (PBM) firm, which has no retail outlets of its own, unlike rival CVS Health.

Miller did not name which pharmacies would be part of the new program, saying he and his staff are looking to line up chains and independent pharmacies by year's end.

"It's such a rapidly growing problem," said Miller. "We have got to change the paradigm, and we think pharmacies are the way to do that."

Express Scripts has taken a public stance on combating drugmakers when it comes to high costs, but its tough negotiating tactics have also put it at odds with its partners at times.

Four years ago, Walgreens and Express Scripts went to court over a contract dispute. The issue was resolved and Walgreens is now the PBM's preferred pharmacy network for Medicare drug plans.

Currently, Express Scripts is in a contract dispute with its largest customer, Anthem.

Some analysts question whether Express Scripts can survive as a standalone PBM long-term if it loses Anthem as a customer. The nation's second-largest insurer says it is now considering the possibility of bringing its pharmacy services in-house, after having sold its PBM business to Express Scripts seven years ago.

Anthem CEO Joseph Swedish told analysts during his company's earnings conference call this week that re-establishing its pharmacy benefit unit is one of the possible options if things aren't resolved.

"It does have costs associated with it, we recognize that. But again, let me underscore, it's not a decision that is imminent. We have call it a journey that we have to administer with respect to our ongoing negotiations," he said.

At a time when the health industry is shifting to a system that pays for value and better outcomes, Express Scripts is trying to prove to its customers that it provides value and savings.

In addition to the diabetes program, the company plans to use a more targeted approach to providing drugs for inflammatory diseases like psoriasis.

A breakthrough drug from Regeneron to treat severe psoriasis is expected to come to market early next year, which could help more than a million people who don't respond to current treatments. That drug will likely be costly, so Miller said Express Scripts wants to work with doctors to determine which patients really need the new treatment for their chronic condition.

"We're going to make sure the right patient is getting the right drug," he said. "When we can work closely with the doctors we can get better outcomes and lower costs."