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Illustration: Rebecca Zisser/Axios

Starting this spring, five corporate giants — Anthem, Cigna, CVS Health, Humana and UnitedHealth Group — will control health insurance and pharmacy benefits for more than 125 million Americans.

Why it matters: Most of this happened through rapid consolidation, and now the pressure is on these companies to prove they can better control both medical and drug spending with everything under the same roof.

Driving the news: Anthem has been working for over a year to create its own pharmacy benefit manager, called IngenioRx, so it could sever ties with Express Scripts.

  • Anthem's new prescription drug negotiator is now ready to go live by March, 10 months ahead of schedule, the company said Wednesday.

This is the new landscape. These 5 companies will handle both drug and medical bills for millions of people across Medicare, Medicaid and employer-based insurance.

  • UnitedHealth Group is the largest entity combining health insurance and pharmacy benefits, with UnitedHealthcare and OptumRx (a PBM that got significantly bigger after it absorbed Catamaran in 2015).
  • CVS acquired Aetna to pair with its existing PBM, Caremark.
  • Cigna now owns Express Scripts.
  • Anthem will be moving millions of people onto IngenioRx this year.
  • Humana also has its own PBM, and it's the fourth-largest by prescription volume.

It's worth noting that several Blue Cross Blue Shield companies also own a PBM, Prime Therapeutics.

What they're saying: PBMs "don't need to be independent entities with their own profit margins ... that adds costs," former Aetna CEO Mark Bertolini said in 2017.

  • Some research says combining health care services and prescriptions under one benefit (not necessarily one common owner) could save money, if the insurer helps people manage their diseases.
  • But insurers and PBMs have lived under the same roof before, and these companies have been doing the same work while U.S. health care spending has continued to rise.

Reality check: These companies would not have pursued merging medical and drug plan offerings if they didn't think there was a lot of money to retain.

  • Anthem's ahead-of-schedule PBM raised the company's projected 2019 adjusted earnings per share to $19 — significantly above every Wall Street estimate. Of the $4 billion in savings Anthem expects from the PBM, 20% will immediately be booked as profit.

Go deeper

6 mins ago - World

WHO revises air quality guidelines to reduce deaths from pollution

Smoke from California wildfires over the Golden Gate Bridge in San Francisco in August 2021. Photo: David Paul Morris/Bloomberg via Getty Images

The World Health Organization on Wednesday updated air quality guidelines it set roughly 15 years ago, saying that negative health effects from air pollutants can begin at lower levels than it previously thought.

Why it matters: The changes are meant to reduce deaths from pollutants that cause cardiovascular and respiratory diseases and prematurely kill an estimated 7 million people around the world annually, according to the WHO.

Ben Geman, author of Generate
2 hours ago - Energy & Environment

The road to COP26 gets slightly easier

Illustration: Annelise Capossela/Axios

The bad diplomatic vibes heading into the critical United Nations climate summit in Glasgow, Scotland, might be improving slightly.

Catch up fast: Chinese President Xi Jinping yesterday pledged to end overseas finance for building new coal-fired power plants and boost support for clean energy in developing nations.

Corporations turn focus to retaining frontline workers

Illustration: Shoshana Gordon/Axios

Companies are narrowing the blue- and white-collar experience as they're forced to adapt to a worker-led market.

Driving the news: Basic office tools and concepts like corporate communications and schedule flexibility are migrating to frontline operations through investments in technology.