Kroger extends PBM coverage with Prime Therapeutics

With its Express Scripts contract slated to lapse, The Kroger Co. has renewed its pharmacy network participation with pharmacy benefit manager (PBM) Prime Therapeutics LLC.

Cincinnati-based Kroger said its Kroger Health health care arm has inked a direct agreement for Kroger Co. pharmacies to remain in-network for commercial, Medicare and Medicaid customers with Prime Therapeutics effective Jan. 1. Overall, Kroger Health operates more than 2,200 pharmacies under nearly 20 banners and over 225 Little Clinics in 35 states, serving 17 million-plus customers annually.

A diversified PBM, Prime Therapeutics is collectively owned by health insurer Blue Cross and Blue Shield Plans, which serves more than 33 million people nationwide.

“Kroger is always looking for new opportunities and collaborations to make Medicare more accessible, and our direct agreement with Prime delivers benefits for our customers and for the thousands of communities we operate in daily,” Kroger Health President Colleen Lindholz said in a statement. “We look forward to working collaboratively to improve the health outcomes of our collective customers by increasing health access, delivering pricing transparency and ensuring affordable prices.”

The agreement with Prime Therapeutics shores up Kroger Health’s PBM coverage amid the supermarket giant’s dispute with Express Scripts. At the end of September, Kroger Health said it submitted written notice of plans to end its pharmacy provider pact with Express Scripts, a Cigna subsidiary, for commercial customers after Dec. 31. The retailer noted at the time that, under the contract proposal from the PBM, its pharmacies would be filling prescriptions below cost.

Kroger reported that more than 90% of its pharmacy patients would be unaffected by the contract non-renewal, meaning that most Express Scripts members wouldn’t be able to get their prescriptions filled at Kroger Co. pharmacies.

As of Jan. 1, most members of the U.S. armed forces and their families using Express Scripts benefits won’t be able to fill scripts at Kroger Co. pharmacies, since Express Scripts is the PBM for Tricare, the military’s health insurance provider. Also after that date, Kroger Specialty Pharmacies won’t be able to fill specialty drug prescriptions for patients receiving PBM coverage for those medications through Express Scripts.

On Friday, Kroger said its pharmacies remain in-network with many other PBMs, including Prime, even with Express Scripts—the nation’s second-largest PBM—no longer an option starting in 2023. The grocer added that customers also can join the Kroger Rx Savings Club, use a third-party discount card or manufacturer coupon when eligible to purchase a drug, or pay the retail cash price for a prescription.

The direct agreement with Prime will prevent disruption to Prime Medicare Part D members affected by Kroger’s year-end termination with Express Scripts, as those patients will be able to continue to receive PBM coverage, Kroger noted. Kroger Co. pharmacies remain in-network for Prime’s Part D Plan clients and nearly all national and regional Part D plans, the retailer said.

“It was critical for Prime to maintain the Kroger Family of Pharmacies as an option for our members in our network of high-quality pharmacy providers, given their strong record of meeting and exceeding Centers for Medicare & Medicaid Services’ quality metrics,” Dave Schlett, executive vice president and PBM solutions president at Eagan, Minnesota-based Prime Therapeutics. “Prime and Kroger share a common focus on member-centered care and providing our members continued access to the Kroger Family of Pharmacies.”

Earlier this month, Kroger Chief Financial Officer Gary Millerchip said the contract termination with Express Scripts is expected to trim sales by about $100 million in Kroger’s fiscal fourth quarter, in turn impacting identical sales without fuel by roughly 35 basis points.