North Carolina treasurer says taxpayers to save $700M with new State Health Plan contract
(The Center Square) – North Carolina’s new pharmacy benefits manager contract for its State Health Plan will save taxpayers more than $700 million, officials said.
The State Health Plan Board of Trustees approved the contract with Caremark PCS Health (CVS), which State Treasurer Dale Folwell and State Health Plan officials announced Thursday. They estimate the state could save $701.1 million under the three-year plan.
“We are pleased to be able to offer continuity in our [pharmacy benefits manager] services, avoiding member disruption as well as saving Plan members and taxpayers like them over $700 million,” Folwell said.
Pharmacy benefit managers are subcontractors that often dictate how much a pharmacy can charge a customer for prescription medications. Health insurance companies and Medicaid pay pharmacy benefit managers to negotiate prices with drug manufacturers on their behalf and maintain medication lists.
According to fiscal analysts, the North Carolina Department of Insurance reportedly has 32 pharmacy benefits managers as third-party administrators that do business in the state.
The State Health Plan provides health care coverage for current and retired state employees, including current and former lawmakers and their dependents. The state covers the employer portion of the cost, and the employees cover a share.
CVS Caremark is the current pharmacy benefit manager for the State Health Plan and was awarded the contract through a competitive process, according to the treasurer’s office. Blue Cross Blue Shield of North Carolina with Prime Therapeutics, Express Scripts and OptumRx also submitted proposals to the state, officials said.
“All of the competitive bidders made excellent, cost-saving proposals, but in the end, the board selected the Caremark PCS Health proposal,” Folwell said.
The total cost of the CVS contract, including member copays, is $3.39 billion. Services under the contract will start on Jan. 1, 2023. The contract will expire Dec. 31, 2025, with the option to renew for two one-year terms, officials said.
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