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Anthem Inc. plans to create its own pharmacy benefit manager in a move that will cut ties with the big insurer's current partner, Express Scripts Holding Co...The new PBM, dubbed IngenioRx...Anthem has also signed onto a five-year agreement with CVS Health Corp. that will provide prescription fulfillment and claims processing services, as well as other benefits like larger scale. The agreement is slated to begin on Jan. 1, 2020, after Anthem's contract with Express Scripts expires... Anthem leadership said the pivot will save an estimated $4 billion annually once IngenioRx becomes fully integrated…our new PBM will be focused on managing the total cost of healthcare to improve affordability for our members...

U.S. government has suspended new enrollment in Cigna Corp's Medicare Advantage health plans for seniors and standalone Medicare prescription drug plans, citing noncompliance in its appeals and grievances procedures...Officials also found problems with the administration of its covered drug plans and compliance program, such as not properly handling prior authorization and exception requests... Centers for Medicare and Medicaid said Cigna's deficiencies posed "a serious threat to the health and safety of Medicare beneficiaries" and followed years of noncompliance….Sanctions will remain in place until they are corrected and will likely not recur...Cigna plans to be bought by Anthem Inc in a $45 billion deal that is under review by antitrust regulators.

Which health care companies have traditionally been the most shareholder friendly? Turns out Pfizer…is one of them. But what about the rest of the sector?...Health care companies have been actively returning capital to shareholders over the past 10 years, but not all of its sub-industries were active participants. However, that may change, particularly as several biotech companies start to mature…"Biotech has been increasingly active in repurchasing shares during the past five years,"…."We expect these trends to continue in the next several years, and we anticipate that more biotech companies will engage in similar capital deployment activities in the future as their businesses mature and they begin generating steady cash flows. Although we do not anticipate biotech to overtake the pharmaceutical industry."…So which health care companies have led the way with the most returned capital to shareholders over the past 10 years? Here's the list..

1. Pfizer Inc.; Pharmaceuticals; YTD return: 3.3%; TRC 2005-2014: $127.37 billion
2. Johnson & Johnson; Pharmaceuticals; YTD return: -2%; TRC 2005-2014: $108.4 billion
3. Merck & Co. Inc.; Pharmaceuticals; YTD return: -4.7%; TRC 2005-2014: $68.1 billion
4. Amgen Inc.; Biotech; YTD return: 0.39%; TRC 2005-2014: $39.56 billion
5. United Health Group Inc.; Managed Health Care; YTD return: 11.7%; TRC 2005-2014: $36.27 billion
6. HCA Holdings Inc.; Health Care Facilities; YTD return: -8.1%; TRC 2005-2014: $33.54 billion
7. Abbott Laboratories; Health Care Equip ; YTD return: 2.2%; TRC 2005-2014: $33.16 billion
8. Anthem Inc.; Managed Health Care; YTD return: 4.5%; TRC 2005-2014: $33.11 billion
9. Bristol-Myers Squibb Co.; Pharmaceuticals; YTD return: 14.9%; TRC 2005-2014: $27.6 billion
10. Medtronic Plc ; Health Care Equip ; YTD return: 4.7%; TRC 2005-2014: $24.4 billion

Doctors say primary care is growing fragmented and turning into more of a commodity, with physician access based on what consumers will pay…the role of primary care has diminished ... and I don't see encouraging signs that it is having a renaissance,.. the result of technology and competition creating more convenient options for care that does not require an in-person doctor visit… changes have helped make basic care more accessible to patients and lowered the cost per visit for many consumers… Patients are opting for drugstore clinics over doctor's offices, and many will soon start wondering why they even need to leave the house when smartphone apps let them chat live with a physician.

Pharmacy benefit manager Express Scripts Holding Co has accused Anthem Inc of negotiating their contract in bad faith and is seeking a court order that the health insurer has no right to demand lower drug prices...The allegations, made in a filing in federal court...in response to a lawsuit Anthem brought against Express Scripts last month seeking $13 billion in price cuts over the remaining four years of the companies' contract...Express Scripts said...the contract did not require it to offer any specific price cuts, but only to negotiate in good faith...Express Scripts said it had proposed five price cuts "within the range" of Swedish's projections last June, but that all were rejected, suggesting that Anthem was acting in bad faith when it brought its $13 billion lawsuit.

Health insurer Anthem Inc. wants $3 billion a year more in savings on drugs from Express Scripts Holding Co., and is threatening to ditch the company in a move that would depose the pharmacy benefit manager as the country’s biggest...The insurer, which contracts with Express Scripts to manage prescription drug costs for its members, said the pharmacy manager should be passing along about $3 billion a year more in the savings it negotiates from drug companies... The two may be running out of time. “We have a very involved dispute resolution process in the contract that has been fully exhausted”...Anthem took the dispute public because the company wasn’t getting the savings it needed to offer more competitive products, such as Medicare drug plans..."Both of us have to step back and see whether we’re honoring the contractual terms of the agreement"...If not, “you have your legal remedies.”

As U.S. health insurers chart an unprecedented consolidation of the industry, hospitals are taking a fresh look at becoming insurers themselves to keep more of their patients' healthcare dollars in house… some hospitals are concerned about the impact of this consolidation in their local markets, and are considering offering their own insurance plans… Many hospital systems have also been buying up individual doctor practices, as well as rehabilitation and skilled nursing facilities, which give them a broader network of services…Among for-profit hospital operators, Tenet Healthcare Corp operates six health plans…

...Anthem Inc said it had sued pharmacy benefit manager Express Scripts Holding Co to recover damages from drug pricing it believes was too high...latest development in a months-long dispute over Anthem's contract with Express Scripts...The lawsuit also seeks to recover damages from operational issues and for a declaration of Anthem's right to terminate its contract with Express Scripts…Anthem, which has been seeking $3 billion in annual cost savings through a repricing provision in its 10-year contract with Express Scripts, said it had not yet decided whether to end the contract...The latest news has taken a very unhealthy turn and we see it unlikely that Anthem renews its contract with Express Scripts past 2019, and is likely to leave sooner to the extent it can manage the transition for consumers smoothly...Express Scripts...said in a statement that it believed the lawsuit to be without merit. The company has consistently acted in good faith and in accordance with the terms of its agreement with Anthem…

UnitedHealth Group Inc. should have stayed out of Obamacare’s new individual markets longer, the chief executive officer of the biggest U.S. health insurer said…after announcing last month that it will take hundreds of millions of dollars in losses related to the business…While the company’s other lines of business are growing, instead of expanding into Obamacare next year, the company should have kept waiting, UnitedHealth CEO Stephen Hemsley said…“It was for us a bad decision,”…“I take accountability for sitting out the exchange market in year one so we could in theory observe, learn and see how the market experience would develop. This was a prudent going-in position. In retrospect, we should have stayed out longer.”…UnitedHealth is not alone in its Obamacare struggles. Other insurers, including competitors Anthem Inc. and Aetna Inc., have also either suffered losses in the markets or said they haven’t seen the margins they expected.

Mergers will benefit consumers, CEOs of both companies tell Senate panel…chief executives of Aetna Inc. and Anthem Inc. defended their merger deals before a Senate subcommittee, facing sharply critical testimony that raised questions about the impact of health-insurance consolidation…Aetna is seeking to acquire Humana Inc.,..focused largely on the private Medicare plans known as Medicare Advantage. Anthem aims to take over Cigna Corp…The two deals together would shrink the top five health insurers to a big three, each with annual revenue of more than $100 billion. The third player would be UnitedHealth Group Inc.