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Cigna's Express Scripts launches cost-based drug pricing model

Published Nov 14, 2023 12:14PM ET
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In a move to address the rising cost of prescription drugs in the United States, Cigna (NYSE:CI)'s pharmacy benefit manager (PBM) unit, Express Scripts, announced today the launch of its new cost-based pricing program named Express Scripts ClearNetwork. The program is set to transform how PBM clients, including employers and health plans, purchase medications by offering them at wholesale costs plus a maximum fee of 15%, starting from early 2024.

The ClearNetwork program will be available to over 65,000 participating pharmacies across the nation and applies to all drugs on a plan sponsor's formularies. This innovative pricing strategy reflects similar approaches taken by entities like Mark Cuban Cost Plus Drug Company, aiming to make drug costs more transparent and affordable.

Adam Kautzner, President of Express Scripts under Evernorth Health Services—a subsidiary of The Cigna Group—has emphasized the need for such a program in light of the regulatory scrutiny over PBMs' role in escalating US drug prices. Kautzner pointed out that high drug costs often stem from manufacturers' pricing strategies, which have been controversial and subject to debate.

The ClearNetwork determines drug acquisition costs using benchmarks such as Predictive Acquisition Cost, National Average Drug Acquisition Cost, and Wholesale Acquisition Cost. To these figures, pharmacy and administration costs are added, providing a clear picture of pricing.

In addition to the newly unveiled ClearNetworkSM, Express Scripts has been proactive in offering transparency initiatives like ClearCareRx™ and programs such as Copay Assurance Plan, SafeGuardRx®, Embarc Benefit Protection®, and Patient Assurance Program®. These programs have reportedly generated significant savings for consumers and clients in 2022, amounting to over $56 billion.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Cigna's Express Scripts launches cost-based drug pricing model

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