CVS Tumbles as California Insurer Plans to Drop Its PBM (3)

CVS Health Corp. shares tumbled after Blue Shield of California, one of the state’s largest health insurers, said it would drop the company’s Caremark unit as its main pharmacy benefit manager.

The insurer, a nonprofit, said Thursday it expects to save as much as $500 million a year by switching to a group of companies including Amazon.com Inc. and an upstart from billionaire Mark Cuban. It’s the biggest win yet for those newcomers trying to upend the existing prescription benefits system, and if it works could provide a blueprint for other insurers and employers to follow.

The ...