Catamaran signs 10-year PBM outsourcing deal with Cigna
BLOOMFIELD, Conn. — Catamaran will provide pharmacy benefit management services to Cigna Corp. for 10 years under a new deal between the PBM and the health insurer.
The two companies said they would partner on sourcing, fulfillment and clinical services to drive better cost and clinical outcomes for patients and employers. Cigna will lead formulary management, clinical and product development and sales and marketing while managing day-to-day customer- and client-facing functions, providing clinical services to more than 8 million customers and integration of medical care and disability management with clinical and pharmacy programs. Cigna also will continue to be the brand for pharmacy-related customer interactions, and all home-delivery prescription drugs and refills will be dispensed and distributed under its name and label.
"Our integrated pharmacy benefit management business has delivered exceptional results for our customers and clients and continues to be an essential part of our strategy," Cigna president and CEO David Cordani said. "This strategic PBM partnering agreement will complement Cigna's strengths of partnering with physicians to engage customers in their overall health and wellness."
Cigna said the deal would add about 50 cents to its share price in 2015 and expected costs related to the deal after taxes to reach about $25 million in second quarter 2013. Financial terms of the deal were not disclosed.
Industry analyst Adam Fein, writing in his Drug Channels blog, wrote that Cigna was "showing confidence in the independent PBM model" by entering an outsourcing deal with Catamaran. Of the three models it could have chosen — insourcing, full outsourcing and selective outsourcing — it chose the selective outsourcing model, which Fein compared with the 12-year contract that Aetna signed with CVS Caremark in 2010.
This, Fein wrote, was because of terms of the deal that included Cigna's retaining formulary management, clinical and product development and other services and leading the integration activities of medical and pharmacy benefit; and Catamaran's provision of prescription-drug procurement and inventory management, order fulfillment, retail-network management and claims processing while maintaining a mostly behind-the-scenes role.