Rite Aid May Form Closer Ties With Larger PBM Prime Therapeutics

Rite Aid may form even closer ties with the pharmacy benefit manager Prime Therapeutics, which has more national scale thanks to its ownership by some of the nation’s largest Blue Cross and Blue Shield plans.

Rite Aid earlier this week announced plans to close more than 60 stores and signed a “rebate aggregation” agreement between the drugstore chain’s Elixir PBM and Prime Therapeutics “to drive increased value for all of Elixir’s PBM clients.” The store closures and the arrangement with the larger Prime PBM is part of an effort to improve operations.

“We are going after the digital, retail PBM, specialty and mail order pharmacy markets that will allow us also to expand beyond our 17-state footprint to be a national provider of pharmacy in an omnichannel way, not in a brick-and-mortar way,” Rite Aid chief executive officer Heyward Donigan told analysts Tuesday during the company’s quarterly earnings call.

But the rebate aggregation arrangement with Prime may be broader and comes at a time rival PBMs are growing and gaining more scale. “The CEO of Prime and I have discussed this to further partner in some very interesting ways, which I can’t get into now,” Donigan told analysts.

Though Donigan wouldn’t disclose potential ways Prime and Rite Aid or its Elixir PBM will work together, such discussions come during a period of new relationships between owners of drugstore chains and health insurance companies and PBMs.  


Rival PBMs of Rite Aid’s Elixir have gotten bigger and competition is fierce to control drug prices for their clients. PBMs are the middlemen between drug makers and patients when it comes to purchasing drugs in bulk and leveraging their buying clout to negotiate better discounts for consumers and employers on prescription drugs.

Big insurers like Cigna own the Express Scripts PBM while Anthem launched its own PBM IngenioRx two years ago and the nation’s largest health insurer, UnitedHealth Group, owns OptumRx. CVS Health, which owns the Caremark PBM, also has more clout after it bought the health insurer Aetna three years ago.

Donigan said Rite Aid may have opportunities with other PBMs as well.

“I do think when you look at all the PBM relationships, they are complicated and they are also fulsome,” Donigan told analysts. “We continue to have opportunities to partner with other PBMs. And I think we also would look to have an expanded relationship with some over time.”

The Tycoon Herald