Express Scripts Picks Up Wellpoint's PBM

April 13, 2009 ( - Express Scripts announced today that it was acquiring the pharmacy benefit management business of WellPoint in a deal valuing the unit at $4.68 billion.

The amount, to be paid at closing, will include cash and up to $1.4 billion of the common stock, Express Scripts said in a regulatory filing, according to the New York Times.   The transaction includes a 10-year contract for Express Scripts to provide services to WellPoint, the statement said. The deal, which is expected to close in the second half of this year, includes a consideration for the value of a future tax benefit for Express Scripts (see  WellPoint Puts PBM on Auction Block ).

The acquisition of the WellPoint business, which includes its NextRx unit, would give Express Scripts the expanded presence it had previously sought in the pharmacy benefit manager sector, according to the report.   NextRx subsidiaries provide pharmacy benefits management services to about 25 million Americans and manage more than 265 million adjusted prescriptions annually.

The chief executive of Express Scripts, George Paz, said that the deal will allow the company to “optimize the cross-selling of proven trend management tools such as generics, home delivery and specialty pharmacy.”  By expanding, pharmacy benefit managers would gain clout when negotiating prices with drug makers for clients, typically big corporations and their employees.

Wellpoint, the largest U.S. health insurer by membership, said in a separate filing Express Scripts may be required to pay WellPoint a breakup fee of $50 million if deal fails, according to Reuters.

WellPoint, one of the nation’s biggest corporate insurers, describes its pharmacy benefit management business as the nation’s fourth largest, behind:

  • Medco Health Solutions,
  • CVS Caremark and
  • Express Scripts.