UPDATE 1-Anthem launches new PBM business, signs pact with CVS Health

(Adds details, background on Anthem and Express Scripts contract)

Oct 18 (Reuters) - Health insurer Anthem Inc said on Wednesday it signed a five-year agreement with drug retailer CVS Health Corp to support its newly launched pharmacy benefit management business.

The news comes at a time when Anthem is close to expiration of its current contract with pharmacy benefit manager (PBM) Express Scripts Holding Co.

Express Scripts in April said it is most likely to lose its top client Anthem after the health insurer accused the company of charging too much for drugs and operational failure in 2016.

Anthem and Express Scripts are involved in a 10-year contract that expires in 2019 end.

CVS Health said the five-year agreement with Anthem would begin in 2020 and run through the end of 2024.

The drug retailer would provide services such as processing claims, patient messaging and point-of-sale engagements for the new PBM unit, IngenioRx.

CVS Health said it expects to incur implementation charges related to the transition of members, but said the costs would not impact its 2017 earnings.

Shares of CVS Health were up 1.6 percent at $73.80 in premarket trading on Wednesday, while Express Scripts' shares were marginally down.

(Reporting by Divya Grover; Editing by Arun Koyyur)