Express Scripts Buys Well Point Pharmacy Benefit Manager
Posted Apr 13 2009 11:49pm
The gain here is big for Wellpoint looking at over 2.5 billion. The pharmacy benefit manager business appears to be consolidating just as other businesses have done. Wellpoint will have more money for Venture Capital Investments? Last time Express Scripts made the news involved the extortion scheme being investigated and that has been pretty quiet of late. Also, if you have Express Scripts as part of your new plan through work, home delivery is the default plan to get your medications to check that out when you enroll if you desire another option. BD
Express Scripts said on Monday that it would buy the pharmacy benefits management (PBM) business of WellPoint for $4.68bn, in a deal that will boost Express Scripts’ purchasing power by making it the second-largest US drug benefits manager in terms of prescriptions processed.
Express Scripts will pay $3.28bn in cash, with the rest of the price paid in stock, to WellPoint, a top US health insurer that provides benefits under the Blue Cross Blue Shield brand.
The Financial Times reported in early March that WellPoint had set up an auction to sell the business, which is largely comprised of a unit called NextRx that processes drug claims and helps establish drug prices and availability.
Industry dealmakers expect other insurers that own PBMs to also consider carving them out or outsourcing more of the work.
WellPoint said it will use $2bn of the sale proceeds for additional share repurchases, $1.8bn to account for taxes and transaction costs, and $500m to pay down debt. It expected to book a $2.5bn gain on the sale of the asset.