Blue Shield of California announced a new pharmacy care model that is designed to fix problems in what it calls “today’s broken prescription drug system.” The nonprofit health plan is transforming how medications are purchased and supplied to its 4.8 million members by selecting organizations that share Blue Shield’s vision for more affordable and transparent pharmacy services.

Today’s announcement is a major milestone in Blue Shield’s Pharmacy Care Reimagined initiative, which will help provide its members with convenient, transparent access to medications while lowering costs. Once Blue Shield’s multi-year strategy is fully implemented, the health plan expects to save up to $500 million in annual drug costs.

Most American adults take at least one prescription drug annually, with more than a third of adults taking at least three medications per year. Already a significant cost, total prescription drug spend in the United States is consistently rising. In 2021, the American healthcare system spent more than $600 billion on prescription drugs – about $1,500 per person, per year.

The current pharmacy care system rewards some stakeholders for selling more drugs at higher costs. Blue Shield is seeking to transform the system into a value-based model that provides members with the medications they need at a more affordable cost.

“The current pharmacy system is extremely expensive, enormously complex, completely opaque, and designed to maximize the profit of participants instead of the quality, convenience and cost-effectiveness for consumers,” said Paul Markovich, president and CEO of Blue Shield of California. “That is why we are working with like-minded partners to create a completely new, more transparent system that gets the right drugs to the right people at the right time at a substantially lower cost.”

In today’s current pharmacy supply chain, there can be up to a dozen companies involved in the process from when a drug is made to when a member receives it. Some can add complexity and cost without adding value or providing transparency into the rationale for their pricing. To simplify the system and cut unnecessary costs, Blue Shield has selected five companies with like-minded philosophical and technology standards to build a new, innovative model following regulatory approval. Together, Blue Shield will offer an integrated, coordinated, and holistic pharmacy experience to its members.

– – Amazon Pharmacy will provide fast and free delivery of prescription medications, complete with status updates, as well as upfront pricing and 24/7 access to pharmacists.
– – Mark Cuban Cost Plus Drug Company will establish a simple, transparent, and more affordable pricing model, reducing surprise drug costs at the pharmacy pick-up counter.
– – Abarca will pay prescription drug claims quickly and accurately while continuing to evolve its technology platform, Darwin, to support new, simplified payment models.
– – Prime Therapeutics will work with Blue Shield to negotiate savings with drug manufacturers to move toward a value-based model that aligns drug prices to patient efficacy and health outcomes.
– – CVS Caremark will provide specialty pharmacy services for members with complex conditions, including education and high-touch patient support.

“Amazon Pharmacy is thrilled to join Blue Shield of California in their effort to help members get the medications they need, when they need them, at a price they can afford,” said John Love, vice president of Amazon Pharmacy. “With the help of Amazon’s upfront pricing, on-time delivery, and round-the-clock access to clinical care, we can provide a customer-centric pharmacy experience that supports better health outcomes.”

“Our company was built on a commitment to deliver transparent and affordable prescription drugs to everyone, and we are excited to collaborate with Blue Shield of California to change this part of the healthcare system in such an impactful and meaningful way,” said Alex Oshmyansky, founder and CEO of Mark Cuban Cost Plus Drug Company. “We hope others will follow in the effort to fix this convoluted and inefficient prescription drug supply chain.”