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(Reuters) - Health insurer WellCare Health Plans said it would change its pharmacy benefit manager to CVS Health Corp from UnitedHealth Corp's Optum Rx, effective Jan. 1.
About 3.8 million WellCare members enrolled under its Medicaid, Medicare and prescription drug plans will be able to access CVS' pharmacy network, WellCare said on Thursday.
Pharmacy benefit managers administer health plans and run large mail order pharmacies, helping insurers get better prices from drugmakers.
CVS is the second-largest U.S. pharmacy benefit manager and drugstore.
WellCare, which focuses on government-sponsored insurance plans, recorded $3.7 million in PBM transitionary costs in the quarter ended Sept. 30.
Shares of WellCare were down about 2 percent while those of UnitedHealth and CVS Health were down about 1 percent in early trading on the New York Stock Exchange on Thursday.
Reporting by Amrutha Penumudi in Bengaluru; Editing by Kirti Pandey