Analyst: CVS’ OptumRx deal amps up competition
In November, OptumRx and CVS Pharmacy announced that they are partnering to provide more convenient choices and lower costs for patients.
OptumRx is UnitedHealth Group’s free-standing pharmacy care services business that manages more than one billion prescriptions annually. Last year, it formed a similar partnership with Walgreens.
“The structure of the OptumRx deal amps up retail competition,” wrote Adam J. Fein, president of Pembroke Consulting and CEO of Drug Channels Institute, on DCI’s web site. Now, OptumRx customers will have to choose either Walgreens or CVS as their sole provider for 90-day supplies, according to Fein.
Fein said CVS needed the partnership to gain scale, even thought it sacrifices some retail per-prescription profitability. Over the past five years, the share of 90-day scripts at chain stores has nearly doubled, from 6.5% in 2010 to an estimated 12% in 2015.
“[Ninety-day] scripts still constitute the majority of mail pharmacy dispensing activity. But, the economic advantage of mail pharmacies is vanishing as payers allow community pharmacies to fill 90-day prescriptions for maintenance medications,” Fein wrote.
The latest deal signals CVS Health’s intention to re-engage with pharmacy benefit managers’ (PBMs) narrow networks, Fein said.