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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

4 mins ago - World

Scoop: Ukraine tells senators post-invasion sanctions are no help

Zelensky. Photo: Johanna Geron/POOL/AFP via Getty Images

Ukrainian President Volodymyr Zelensky told U.S. senators visiting Kyiv this week that waiting to impose sanctions on Russia until after an invasion is of no use to Ukraine, according to four sources familiar with the discussions.

Why it matters: The Senate is currently working on a major sanctions package to deter Russia from attacking Ukraine. Democrats and Republicans are united in their support for Ukraine, but divided over whether it would be more effective to sanction Russia now to signal resolve, or hold up the threat of future sanctions to demonstrate the high costs of an invasion.

Starbucks drops worker vaccine or test requirement after SCOTUS ruling

Photo: Jakub Porzycki/NurPhoto via Getty Images

Starbucks has dropped plans to require that U.S. workers get the COVID vaccine or submit to weekly testing, the company announced Tuesday in a memo to employees.

Why it matters: The company's decision comes in response to the Supreme Court's ruling last week to block the Biden administration's COVID-19 vaccine-or-test requirement for large employers.

4 hours ago - World

Netanyahu plea talks enter crunch time

Netanyahu (right) meets with his lawyer ahead of a court hearing last February. Photo: Reuven Casto/Pool/AFP via Getty

Benjamin Netanyahu, Israel's opposition leader and former prime minister, is negotiating a possible plea deal over the corruption charges against him, but Attorney General Avichai Mandelblit appears to be toughening his terms.

Why it matters: Mandelblit leaves office on Jan. 31. Negotiations could continue beyond that point, but the next attorney general may be less interested in quickly reaching a deal.