Catalyst Buys Walgreen Pharmacy Benefit Management Services For $525M
Posted Mar 10 2011 12:14pm
If you are a member of the Walgreens pharmacy benefit management system, get ready for some changes soon as the acquisition takes place. This does not affect any retail store business, only the mail order prescriptions and I am guessing in time all members will receive notifications. It’s going to be a large number of individuals for Catalyst. Walgreens has been busy with their business analysis systems as there has been quite a bit of activity as back in September of 2010 they swapped out services with Omnicare with home infusion services.
Once the acquisition is done, more than likely you will see formulary changes, at least in name change as well. With all the recent changes it becomes a challenge at times to not only keep track of insurance coverage but also as to where you can get your prescriptions under various plans too. BD
From the website:
“Catalyst Rx is a full-service pharmacy benefit management company providing effective and unbiased solutions to manage your pharmacy benefit. Our innovative clinical programs and award-winning service enables us to achieve industry- leading levels of satisfaction while reducing your pharmacy costs. Founded in 1994 and developed around strong, innovative principles in the management of prescription drug programs, Catalyst Rx currently manages more than seven million members located in the United States and Puerto Rico. Our commitment to innovation, efficiency and superior service helps our clients balance the management of pharmacy costs with quality of care.”
Walgreen Co. (WAG) sold its pharmacy benefits management operation to Catalyst Health Solutions Inc. (CHSI) in a $525 million cash deal that doubles Catalyst's membership and again raises questions about the benefits of linking a drug-store chain with its own PBM business.
For Walgreen, operator of the largest U.S. retail drug-store chain, the move allows it to focus more on broadening its offering of pharmacy, health and wellness services. Catalyst, meanwhile, continues a rapid expansion that makes the Rockville, Md., company more of a rival to larger PBMs.
"This is a significant milestone for Catalyst and an important next step in our long-term growth strategy," Catalyst Chief Executive David Blair said.
Catalyst shares rose 18.6% to $52.80.
Acquiring Walgreens Health Initiatives broadens Catalyst's client type, improves the company's purchasing economies, expands its marketing opportunities and brings strategic assets from the Walgreen PBM, including health information-technology, management team and Medicare prescription-drug benefit services, Blair said.
The Walgreen deal will swell Catalyst's membership to 18 million members from 7 million; and annual prescription volume will grow to more than 165 million from 80 million. Those prescriptions account for some 4% of the overall market, according to J.P. Morgan analyst Michael Minchak.