Express Scripts, expanding PBM reach, agrees to buy WellPoint's NextRx unit
NEW YORK And then there were three.
With the decision by insurance giant Wellpoint to get out of the business of managing and coordinating pharmacy benefits for some 25 million of its members, the field of battle among the competing pharmacy benefit management firms will soon narrow. If the deal is approved, three large-scale players – CVS Caremark, Express Scripts and Medco Health – will control the pharmacy use patterns of well over 100 million Americans and account for more than 2 billion prescriptions dispensed annually in the Untied States.
The deal to buy Wellpoint’s PBM business, the nation’s fourth-largest, marks something of a vindication for Express Scripts, which lost a battle for control of Caremark to CVS two years ago. If successful in its bid – the deal must still pass muster with federal antitrust regulators – Express Scripts could add as many as 25 million patients to its PBM rolls and boost its managed prescription business by half, to some 750 million scripts dispensed annually by its pharmacy network.
Express Scripts chairman and CEO George Paz made it clear the company’s focus going forward would be to streamline pharmacy benefits and cut costs – both for Express Scripts and for its corporate clients who pay the prescription bills – by trying to shift more plan members to generics. Those cost-cutting efforts are also likely to spur more preventive-health programs and pharmacy interventions for the patients Express Scripts covers.
“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 Paz in a written statement.
Citing the nation’s financial crisis, the leader of the nation’s largest PBM underscored the urgent need within the managed care industry to cut costs and boost preventive-care efforts on behalf of employers earlier this month.
“The current economic environment has understandably created a sense of urgency for companies to evaluate their benefit designs in order to meet financial goals, with 74 percent of our employer clients telling us that reducing overall health costs is their number one measure of success in the coming year,” said CVS Caremark chairman, president and CEO Tom Ryan. “Furthermore, our research indicates that our clients are looking to CVS Caremark to help them accomplish these savings by increasing plan participant engagement in their health care rather than simply increasing their share of the cost.”