CVS Health Shares Slide 8% as Blue Shield of California Shifts Away from PBM Services

Shares of CVS Health were down 8% following an announcement by Blue Shield of California that it intends to reduce its reliance on CVS's pharmacy benefit management services. CVS Caremark is one of the main players in the PBM industry, controlling a significant portion of the market alongside two others. Blue Shield of California aims to save $500 million annually by reshaping its pharmacy care model, moving away from relying solely on CVS. Instead, it plans to partner with companies like Amazon and Cost Plus Drugs, owned by Mark Cuban. Paul Markovich, Blue Shield of California's CEO, stated that the decision is not solely about CVS but rather about the flaws in the pharmacy distribution system that need a fresh start. CVS downplayed the financial impact of this change, stating that it won't affect their 2023 guidance. Analysts estimate the impact on CVS to range from $30 million to $100 million in 2025.