Anthem’s newly created pharmacy benefit manager (PBM), IngenioRx, snapped up data-driven pharmacy startup Zipdrug to offer its on-demand medication delivery in Anthem health plans or as a standalone service. For context, Zipdrug’s app works by automating in-home prescription ordering and delivery to improve medication adherence. The app also offers services that determine which pharmacies have the lowest copay.

just three players control over three quarters of the US PBM market



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Zipdrug’s services should help Anthem ensure higher levels of medication adherence among its members, which should curb long-term healthcare costs for both the payer and its enrollees. According to a 2019 report in the American Journal of Managed Care, a major barrier that contributes to delayed or improper prescription medication adherence is a high out-of-pocket cost: The median US household already spends more than $3,700 annually in out-of-pocket costs alone. 

This is bad news for payers like Anthem, as low medication adherence can lead to preventable emergency department visits — which cost the US healthcare system upward of $32 billion a year. Anthem should reap massive benefits from the new Zipdrug deal, given that its new platform will ensure easier medication delivery by boosting member engagement and tracking down the lowest copay for users.

PBMs haven’t traditionally offered digital services — but we’ve begun to see digital transformation and disruption reaching the space. PBMs are considered the middlemen between insurers and big pharma and have significant negotiating power — but they haven’t faced as much pressure to digitally transform as other legacy healthcare players. However, drug prices are on the rise, and digital options that can complement or serve as medication alternatives can pacify consumers who have to buy costly drugs.

As such, PBMs have started validating digital therapeutics for their payer partners to include in their plans: For example, Express Scripts announced last year that it would be releasing a standalone formulary that spotlights vetted digital health platforms for consumers, and CVS Caremark debuted a similar tool for its payer clients. But it’s not just high costs driving PBMs’ digital transformation efforts; PBMs also have to contend with tech-savvy entrants like Amazon.

The tech giant announced in 2019 that it would use its acquisition of pharmacy startup PillPack to sell prescription drugs to health plans directly — a move that would disrupt the PBM space. Amazon is a tech-savvy player with massive mindshare and holds promise to create more accessible care. We expect to see more PBMs adopt digital services to appease consumers and keep up with entrants to retain their appeal for both health plan members and payers.

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