Prime Therapeutics, a pharmacy benefit manager owned by Blue Cross and Blue Shield health insurers, promoted Mostafa Kamal to succeed the retiring Ken Paulus as chief executive officer.
The new leadership at Prime comes following the PBM’s $1.35 billion acquisition of MagellanRx Management, which was formerly part of Magellan Health, and divested in December by Centene. The acquisition was designed to unite Prime’s PBM capabilities with MagellanRx’s specialty drug management expertise, executives have said.
Prime is owned by 19 Blue Cross and Blue Shield Plans and manages the pharmacy benefits of nearly 38 million health plan members across the U.S. Prime’s board indicated Kamal, who is 42 years old, is the right executive to grow the larger company. Paulus, who is 64 years old, is retiring after four years as Prime’s CEO.
“Mostafa’s vision for what we can become is inspiring and bold,” Maurice Smith, Prime’s board chairman who is also president and CEO of one Prime’s major owners, Health Care Service Corporation, the parent of five Blue Cross and Blue Shield plans, said in announcing Kamal as the new CEO. “As Prime seeks to reimagine pharmacy benefit management, he is the right person to build on the strong foundation Ken leaves as he retires.”
Prime said the company has $60 billion in drug spend under management and was ranked 5th among PBMs in market share last year by Drug Channels with 5% of “total equivalent prescription claims managed”in the U.S. The top four ranked PBMs by market share were: CVS Health’s Caremark PBM (33%); Cigna and Evermorth’s Express Scripts PBM (24%); UnitedHealth Group’s OptumRx (22%); and Humana Pharmacy Solutions (8%), according to Drug Channels.
It’s a critical time for PBMs, which are hired by employers, health plans and government health programs to manage the rising costs of prescription drugs. Increasingly, just a small share of prescription drug claims account for most of the total spending on prescriptions thanks to expensive drugs derived from biotechnology.
But these days PBMs are poised to make a difference as less expensive copycat drugs known as “biosimilars” are developed as alternatives to the much more expensive brand name. PBMs are working to shift patients to biosimilars that work just as well as the brands.
Prime said Kamal, who has been president of Prime Therapeutics, and the CEO of Magellan Rx, played a “key role in shaping the 2022 agreement that brought together Prime and Magellan Rx.”
“Today, the united enterprise is ushering in the next generation of pharmacy solutions that promote the health and wellbeing of members and patients while improving affordability, access and quality,” Prime said in a statement.
Centene, which sells government subsidized health insurance including Medicaid, Medicare Advantage and individual coverage known as Obamacare, decided to sell MagellanRx to Prime and exit the PBM space under chief executive officer Sarah London as part of her strategic plan to focus on core businesses.