Will the Express Scripts-Medco deal drive additional industry consolidation?

Consolidation in the pharmacy benefits management market has been an ongoing trend for years. In addition to the game changer announced yesterday in which Express Scripts will acquire Medco Health, there have been a number of recent acquisitions in the industry.

Will yesterday’s acquisition drive additional transactions?

Recent Industry Acquisitions
Express Scripts acquired health insurer WellPoint’s pharmacy benefits management unit NextRX for $4.68bn in cash and stock.

CVS Caremark acquired the Medicare Part D business of Universal American for approximately $1.25 billion. Universal American is a leading Medicare Prescription Drug Plan (PDP) sponsor based in Rye Brook, New York.

UnitedHealth Group, unlike rivals WellPoint and Aetna who have sold or outsourced prescription drug benefits, the company’s OptumRx unit (formerly Prescription Solutions) plans to take over the $11 billion drug benefits business it outsourced to Medco Health Solutions.

Catalyst Health Solutions acquired Walgreens’ pharmacy benefit management (PBM) subsidiary, Walgreens Health Initiatives, Inc. (WHI), for $525 million in cash. Catalyst Health Solutions also acquired IBC’s pharmacy benefit management subsidiaries, FutureScripts, LLC and FutureScripts Secure, LLC (FutureScripts).

Possible Acquisition Targets
MedImpact is a full-service transparent Pharmacy Benefits Management (PBM) company currently serving more than 32 million members nationwide. MedImpact clients include corporations and employers, unions, managed care organizations, health plans, insurance carriers, and third-party administrators, as well as local, state and federal employee programs.

Catalyst Health Solutions’ (formerly HealthExtras, Inc.) subsidiaries include Catalyst Rx, a full-service pharmacy benefit manager (PBM) serving more than seventeen million lives in the United States and Puerto Rico; HospiScript Services, LLC, one of the largest providers of pharmacy benefit management services to the hospice industry; and Immediate Pharmaceutical Services, Inc., a fully-integrated prescription mail service facility based out of Avon Lake, Ohio.

Prime Therapeutics is a thought leader in pharmacy benefit management strategies. The company’s strategic partnership with Blue Cross and Blue Shield plans uniquely positions it to benefit clients with clear contract terms, competitive rates and the full discount from its pharmacy network. Health Plans, employer groups and nearly 17 million members nationwide look to Prime Therapeutics every day to make a difference in the quality, cost and management of their prescription drug benefits.

CIGNA Pharmacy Management (CPM), a specialty division of CIGNA HealthCare, provides integrated clinical pharmacy management, coverage design flexibility and cost management programs for its 6.2 million covered individuals.