Big Rx Acquisition Strengthens Express Scripts
Two large players in health benefits announced a deal this morning, with St. Louis, Mo.-based Express Scripts, Inc. acquiring the NextRx subsidiaries of Indianapolis-based WellPoint Inc. for $4.675 billion. NextRx provides pharmacy benefits management services to about 25 million members and manages more than 265 million adjusted prescriptions annually; the combination means Express Scripts will manage more than 750 million per year, the company said.
Express Scripts also gets a 10-year contract to provide services to WellPoint after the deal closes. "Now more than ever, as the nation focuses on health care reform, this collaboration between Express Scripts and WellPoint represents a shared commitment to achieving optimal health outcomes while driving out wasteful spending," said George Paz, chairman and CEO of Express Scripts. "As we apply our advanced understanding of consumer behavior to an additional 25 million members and manage more than 750 million adjusted prescriptions annually, we will optimize the cross-selling of proven trend management tools such as generics, home delivery, and specialty pharmacy. This alliance also creates the potential to leverage our behavior-centric approach across the medical benefit. Our aligned business model, combined with the complementary expertise and capabilities of WellPoint, creates significant opportunities for accelerated growth for both organizations."
"This transaction provides a unique and compelling opportunity to improve our integrated health benefits offerings to our members while simultaneously delivering significant value to our shareholders," said Angela F. Braly, president and CEO of WellPoint. "As health care costs continue to be a concern to our customers, members, and the nation as a whole, we are very focused on initiatives that keep health benefits affordable. Importantly, through this strategic alliance with Express Scripts, we will enhance the health care value we bring to our members. This alliance will create an organization with greater resources and capabilities, which will provide members with more cost-effective solutions, as well as access to state-of-the-art PBM services."
The deal is expected to close in the second half of 2009. Express Scripts trades on the NASDAQ exchange as symbol ESRX, while WellPoint, an independent licensee of the Blue Cross and Blue Shield Association that serves BCBS members in 13 states, trades on the New York Stock Exchange as symbol WLP.