The state of Black Healthcare (Part II)

The relationship between insurance companies and pharmacies is as complex as that between physicians, hospitals, medical facilities, and the pharmaceutical industry.

- Lorraine Lavender-Sams

Although consumers are generally aware that these relationships exist, they’re largely unaware of the depth and complexity of the pathways they take, which affects their ability to access, maintain, and improve medical care.

These associations are not at all beneficial to consumers and only serve to enrich the pharmacy conglomerates, shareholders, and CEOs of these organizations. Many of these insurance companies are subsidiaries of publicly traded companies, such as CVS Health Corporation, the parent company of CVS Pharmacies and the manager of the entire family of CVS brands, including Caremark (PBM), CVS Caremark (pharmacy benefit manager), MinuteClinic, Aetna Insurance, and others. Having acquired AETNA in a major 69 billion dollar deal completed in 2018, CVS Health Corporation integrated the large Health insurer into its healthcare plan alongside its pharmacies.

Walmart Pharmacy is an example of another corporation with a symbiotic relationship with a healthcare insurer. Walmart’s in-house insurance brokerage, Walmart Insurance Services, partners with carriers, including UnitedHealthcare, Humana, and Anthem, to offer Medicare plans and administers associate health plans through third parties such as UMR and Siblu Cross Blue Shield (formerly Blue Advantage). Walmart acts as a broker, connecting customers with various insurers.

When pharmacies own insurance companies, the parent company manages drug benefits, sets formularies, negotiates pricing, and directs patients to its own pharmacies, effectively steering them away from the competition and keeping profits in-house. They employ methods such as preferred networks and controlling rebates, which can and have affected independent pharmacies and patient choice.