A huge health insurer just decided to build its own middleman to manage prescriptions

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• In April, health insurer Anthem parted ways with Express Scripts, a pharmacy benefits manager.
• Anthem was responsible for roughly 18% of Express Scripts' first quarter 2017 revenue.
• Now, Anthem is launching its own PBM called IngenioRx.

Anthem, which owns a variety of Blue Cross Blue Shield health insurance firms, said on Wednesday that it will be launching its own pharmacy benefits manager.

Pharmacy benefits managers, or PBMs, help negotiate lower prices for prescription drugs for health insurance plans. Anthem said its PBM IngenioRx would work with customers on Anthem plans as well as those who aren't on Anthem plans.

Anthem was up as much as 5% on Wednesday morning after the announcement.

In April, Anthem parted ways with Express Scripts, one of the largest PBMs in the drug industry, after choosing not to renew its contract. Anthem accused Express Scripts of not passing along savings from prescription drugs, claiming Express Scripts overcharged the insurer by billions of dollars. The ending of the contract comes after Anthem last year sued Express Scripts over the issue.

Express Scripts shares were also up about 2% on Wednesday.

The decision to build its own PBM comes at an interesting time as middlemen receive more scrutiny. The hope, Anthem's CEO Joseph Swedish said, is to build a PBM that will "break through what is now a complex and fragmented landscape."

"During the past two years, we have been very clear that we can strengthen the value offered to the marketplace with an improved and aligned PBM model," Swedish said in a news release. "Through the process of evaluating many PBM options in preparation for the expiration of our current contract, we determined that our scale and experience best position us to deliver an innovative solution, and the launch of IngenioRx will allow us to break through what is now a complex and fragmented landscape. It also positions Anthem to take advantage of a unique opportunity to grow and diversify our business within our existing footprint as well as nationally."

As part of the new set-up, Anthem also signed a five-year deal with CVS Health, which operates pharmacies and walk-in clinics starting in 2020.