Molina Healthcare Inc. (MOH) said early Thursday it extended an agreement with CVS Caremark, a unit of CVS Health (CVS), to deliver pharmacy-benefits management, or PBM, services through 2021, a move that Molina said is accretive to its earnings immediately and will also lower its costs.
Under the agreement, effective Jan. 1, CVS will continue to administer pharmacy benefits for about 4 million members Molina serves through its Medicaid, Medicare, and Marketplace health plans, according to a statement.
The extension modifies Molina’s existing agreement with CVS Caremark to align Molina’s pharmacy management strategy with the operational improvement initiatives that have been underway over the last year under its new management team.
“The agreement is immediately accretive to earnings and will enable Molina to remain responsive to state partner requirements as it manages its nearly $3 billion of annual pharmacy expenses in an evolving government-sponsored health care landscape,” Molina said in the statement. “This PBM initiative is one of several that Molina has pursued to lower its costs.”