After Express split, Anthem teams with CVS

Pair creating new pharmacy benefits management company called IngenioRx

Anthem has found a new partner to help run prescription drug coverage after the Blue Cross-Blue Shield insurer’s rocky relationship with Express Scripts ends.

The nation’s second-largest insurer says it will create a pharmacy benefits manager called IngenioRx starting in 2020 and will work with CVS Health Corp. to manage the business. Terms of the deal were not disclosed.

Pharmacy benefit managers, or PBMs, run prescription drug plans for employers, government agencies and insurers. They use their large purchasing power to negotiate prices.

Anthem expects the new deal to generate an estimated $4 billion in annual savings once all of its customers are moved over to it. Company executives also told analysts that they anticipate “significant” membership growth.

Anthem, based in Indianapolis, provides health coverage to more than 40 million people in several states, including big markets like New York and California. The insurer said its PBM will serve its health plans as well as customers outside Anthem. CVS Health, based in Woonsocket, R.I., will process claims services.

Anthem Inc. had left the PBM business in 2009, when it sold its operations to Express Scripts Holding Co. for about $4.7 billion. The two companies started working together, but their relationship soured as they started squabbling publicly over prices.

That fighting led to a lawsuit filed by Anthem last year. The insurer said it wanted to recover damages for drug prices that are higher than competitive benchmarks. Express Scripts said the case had no merit.

Anthem has “absolute confidence” that its new PBM arrangement will give it competitive pricing on prescription drugs, Executive Vice President Brian Griffin told analysts.

Express Scripts spokesman Brian Henry said the company was disappointed Anthem decided to work with another PBM, and they know of no option that will provide “the combination of savings, member and client stability, and clinical expertise that Express Scripts represents.”

Shares of Express Scripts slipped back in April when it said Anthem, its biggest customer, didn’t plan to extend its contract after 2019. and provide other