Anthem's pharmacy revenues ballooned in 2020

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While Anthem's fourth-quarter financial results may have disappointed investors, the insurer's in-house pharmacy benefit manager — IngenioRx — saw significant growth in the final quarter of 2020, according to recent financial filings

In the fourth quarter of 2020, IngenioRx recorded revenues of $5.9 billion, up 81.4 percent year over year. Its operating gain for the fourth quarter of 2020 was $363 million, higher than Anthem's combined operating gain for its commercial/specialty and government insurance businesses. For the year ended Dec. 31, 2020, IngenioRx brought in $21.9 billion in revenue, up 305.6 percent from $5.4 billion in 2019. 

Granted, IngenioRx started its operations in the second quarter of 2019, and completely transitioned members to the service on Jan. 1, 2020, with one of its first commercial partnerships being with Blue Cross of Idaho. So calendar year 2020 was the first full year of operations for IngenioRx. But like competitors Cigna and UnitedHealth Group, Anthem is finding big gains in areas beyond the health insurance business, like pharmacy and health services.

In November 2020, Cigna said its third-quarter revenue gains were driven by Evernorth, which includes pharmacy benefit manager Express Scripts. In its fourth-quarter results for 2020, UnitedHealth's overall growth in revenues was led by its Optum division. Optum, which includes UnitedHealth's pharmacy business, brought in $35.9 billion in revenue for the fourth quarter of 2020, up from $29.8 billion in the fourth quarter of 2019. 

With a full year of operation in 2020 to compare to, the 2021 financial year will shed greater light on just how much IngenioRx will affect Anthem's performance. In a Jan. 27 earnings call with investors, Anthem CEO Gail Boudreaux said 2021 will bring "ongoing opportunities to integrate IngenioRx with our commercial footprint, and that's one of our biggest opportunities still. We still see a lot of runway for us to increase the penetration, particularly in our middle-sized and large accounts with integrated pharmacy benefit offerings."

Anthem first unveiled plans to establish IngenioRx in October 2017. The announcement came after Anthem said in April 2017 it would drop its contract with Express Scripts, which Cigna bought in 2018. The decision came during an ongoing legal battle between Anthem and Express Scripts.

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