Blue Shield of California Drops CVS Pharmacy Services, Shares Plunge

August 17, 2023: Non-profit health insurer Blue Shield of California has dropped CVS Health as its pharmacy benefit manager (PBM), a company that negotiates drug prices for health plans. Blue Shield said it would instead partner with Amazon Pharmacy and Mark Cuban’s Cost Plus Drugs Company to save on drug costs for its nearly 5 million members.

The move sent shares of CVS Health plunging 9% in after-hours trading. CVS is the largest pharmacy chain in the United States, and its PBM is one of the largest in the country. Insurers and consumers have pressured the company to lower drug prices.

The decision by Blue Shield is a significant blow to CVS Health. The insurer is one of CVS’s largest customers, and its business loss could lead to further declines in the company’s stock price.

The move by Blue Shield is also a sign of the growing trend of insurers bypassing traditional PBMs to lower drug costs. In recent years, several insurers have partnered with Amazon Pharmacy or other non-traditional PBMs.

Here are some actionable takeaways from this news:

• If you are a Blue Shield of California customer, you can save money on your prescription drugs by using Amazon Pharmacy or Cost Plus Drugs Company.
• Other insurers may follow Blue Shield’s lead and drop traditional PBMs in favor of non-traditional options.
• This could lead to further declines in the stock price of traditional PBMs, such as CVS Health.

Here are some practical considerations:

• If you are considering switching to a new PBM, you should compare the prices of drugs offered by different PBMs.
• Consider the convenience of using the PBM’s pharmacy network.
• You should contact your insurer to learn more about their PBM options.