First quarter 2020 earnings for many companies and industries fell short of analyst predictions due to the COVID-19 pandemic. However, this was not the case for national health insurers.  In fact, many of these organizations exceeded analyst expectations.  For example, UnitedHealth Group reported first quarter earnings growth of 4.4% ($2.2B)1 and Cigna reported 1.4% total revenue growth while affirming its end of year earnings per share predictions.2  And although Anthem missed their projection, they still had a 20.1% growth in revenue.3  But amid these strong financial numbers, a common theme appears to be present.  In each instance, the pharmacy benefits manager (PBM) was cited as a driver of growth, with IngenioRx (Anthem’s newly launched PBM) having the most profound impact.  It should also be noted that the medical benefit segment realized a degree of cost savings due to decreased medical claims resulting (in part) from a reduction in physician office visits and elective procedures.

One might hope that with early indicators of strong performance, members may be less likely to experience cost-cutting measures and increased benefit restrictions for 2021.  Unfortunately, the reverse scenario may be the more likely outcome as the United States re-opens and members begin utilizing healthcare resources.  According to a recent monitoring report from IQVIA, visits to chronic disease physicians are beginning to return to pre-pandemic levels and new prescription volume is on the rise.4  In other words, rebound utilization of healthcare services could drive costs steeply upward.  At the same time, pharmacy cost pressures still exist as prescription drug affordability remains a key issue.  Hence, despite the ability of national health players to hold the line on financial performance, it is likely that 2021 formulary designs will continue down the path of using tighter formulary access to leverage steeper rebates from drug manufacturers.  Formulary exclusions, a means to tightly restrict formulary access, are also likely to continue an upward trend as new drugs are added to these lists.  In summary, although the landscape pressures have changed due to COVID-19, the competitive environment for formulary access is quite similar.

There are, however, new opportunities for drug manufacturers to compete for access amid a COVID-19 environment.  For example, the uptick in telehealth services is likely to maintain higher utilization moving forward.  IQVIA’s monitoring report indicates that telehealth claims have been relatively constant (since early April) despite rebound utilization in office-based visits.4  This may signal a shift toward use of remote care for chronic condition maintenance and drugs with sound safety profiles, extended dose regimens, or value-add programs with digital connectivity may carry greater weight in formulary decision-making.  Value-based arrangements linked to frequency of patient contact points may offer a new means for partnership, and drugs with strong adherence and persistency profiles may offer benefit in this perspective.  With that said, national payers will continue to prioritize tried-and-true management levers in favor of innovative approaches.  As a result, 2021 formularies may have similar modifications as past year-over-year changes, albeit with an eye toward maintaining positive adaptations that have occurred in a COVID-19 world.


  1. UnitedHealth Group. UnitedHealth Group provides expansive support to COVID-19 response efforts: Reports balanced first quarter performance. Accessed June 16, 2020.
  2. Healthcare Dive. Cigna tops Q1expectations, reaffirms earnings targets despite pandemic. Accessed June 16, 2020.
  3. MarketWatch. Anthem profit tops estimates in Q1. Accessed June 16, 2020.
  4. IQVIA. Monitoring the impact of COVID-19 on the pharmaceutical market. Accessed June 16, 2020.