During the last year, Optum, UnitedHealth Group’s pharmacy benefit manager and care services group, has continued to grow as a major presence in the healthcare industry. Here’s a timeline of Optum’s key updates, reported by Becker’s Hospital Review. The breakdown includes Optum’s moves since June 2019.
RxSense, a high-growth healthcare technology company that utilizes its proprietary technology platform to provide innovative prescription savings solutions to consumers and pharmacy benefits administration and analytics to enterprise customers, announced a significant investment by Parthenon Capital, a growth-oriented private equity firm that has managed funds with more than $5 billion in total capital commitments. Proceeds from the transaction will be used for various growth initiatives. Terms of the investment were not disclosed. At the core of RxSense is an industry leading pharmacy benefits technology platform that provides flexible solutions, enabling efficient management and greater transparency and access to prescription savings.
Wholesale retailer Costco is expanding its footprint in the pharmacy benefit management business by purchasing a minor stake in a PBM owned by St. Louis-based hospital system SSM Health. SSM Health said the deal would allow the not-for-profit system to tap into Costco’s expertise and expand its transparent PBM model, called Navitus Health Solutions, to more people. The deal also includes a specialty pharmacy subsidiary. Costco, meanwhile, could benefit if Navitus members are steered toward Costco stores and clinics, analysts at investment banking and advisory firm Evercore ISI wrote in a research note Wednesday. The retailer could also increase the reach of its own internal PBM business, depending on whether Costco’s own internal PBM integrates with SSM Health’s.
Optum revenues surpassed $100 billion for the first time in 2018, and the company spent the past year making key acquisitions and investments. In addition to its $4.3 million DaVita Medical Group acquisition, which was finalized earlier this year, and its partnership with John Muir Health to manage nonclinical functions including IT and revenue cycle, Optum has made six other key investments and acquisitions in technology companies this year.
A big part of the Trump administration’s plan to lower drug prices is now dead, White House spokesman Judd Deere confirmed to Axios. The administration is backing away from an effort to change the way money flows through federal health care programs Ñ one of the most sweeping elements of its drug-pricing blueprint. That’s bad news for pharma, and the move will put pressure on other parts of the administration’s plan, which is also bad news for pharma. The now-dead proposal would have overhauled the rebates collected by pharmacy benefit managers Ñ the middlemen between insurance plans and drug companies.
When Cigna closed its $67 billion acquisition of Express Scripts in December, less than a year after the companies agreed to combine, it marked the creation of a greater than $140 billion revenue healthcare colossus. How did the companies combine so quickly? Among the change agents was the Chief Technology Officer of Express Scripts Phil Finucane. He has a killer combination of skills in his toolkit, having been an engineer and technology leader at digital native companies such as Zynga and Yahoo! while also working at another acquisitive behemoth, American Express, prior to Express Scripts. As such, he has an unusual ability to draw from the strengths of each environment. Finucane would be the first to admit that Express Scripts was far from perfect and that the integration has had its share of difficulties, but he recently left the company satisfied that he did so with it in better shape than it was when he found it. He describes this remarkable journey in detail in this interview.
Over the next week, CVS Health and Cigna will hold their annual investor days. They will offer business and financial overviews of their diverse companies, including an update on the outlook for their pharmacy benefit managers (PBMs). It’s a tough time to be a PBM. Compensation models are shifting, due to increased scrutiny by payers, regulators, and politicians. Plan sponsors are more sophisticated and seek greater pass-through of rebates, admin fees, and other manufacturer-provided revenues. Network spreads are under pressure, while specialty pharmacy dispensing accounts for a growing share of profits. Plus, the entire drug channel system could move toward a world without rebates. Here, Drug Channels institute CEO Adam J. Fein, Ph.D., updates Drug Channels Institute’s look at PBM market share and reflects on four crucial areas in which PBMs’ compensation will be evolving.
ProCare PBM and MC-21 combine to form MC-Rx. The combination of ProCare PBM and MC-21, both URAC-accredited for pharmacy benefit management services, makes MC-Rx one of the top privately-owned pharmacy benefit management companies in the US and Puerto Rico. Together they have over 50 years’ experience, four major locations, two state-of-the-art 24/7 data and customer support centers, three software research and development centers, and more than 550 employees. By virtue of this combination, MC-Rx will have clients in all 50 states, Puerto Rico, St. Thomas, and the U.S. Virgin Islands.
The sales process for public managed care company and pharmacy benefits manager Magellan Health is moving forward, with potential acquirers including Anthem and UnitedHealth Group. DealBreaker initially reported the news that the bidding process has advanced to the second round with the two insurance companies emerging as leading suitors, along with private equity firm The Carlyle Group. Analysts say the Scottsdale, Arizona-based company’s mix of assets – which ranges from a Managed Medicaid business and radiology and behavioral health benefits – could be a benefit to a strategic investors looking to broaden their payer portfolio. “We see Anthem and UnitedHealth Group as the most likely buyers in light of their synergies with Medicaid in Complete Care, and the PBM across IngenioRx and OptumRx.,” SVBLeerink analyst Ana Gupte wrote in a research note. “OptumRx is seeking specialty Rx and we expect UnitedHealth is looking for regional players to shore up Medicaid. Anthem is poised as well to build their third-party services platform.”
Magellan Health Inc said on Friday it reached an agreement with hedge fund Starboard Value LP to add four new independent directors to the board, including the former chief executive officer of the U.S. healthcare plan and pharmacy benefits manager. Starboard, which owns 9.8 percent stake in the company, has agreed to withdraw its slate of alternate directors and vote in favor of all of the board nominees, the company said in a statement. Activist investor Starboard last month sought to put six directors on the board and sent a letter to shareholders arguing that management should be looking at a number of options, including a sale.
What We Do
Who We Are
How We Work
Who We Help
Get In Touch
Connect With Us
Subscribe to Our Daily Note
We publish a Daily Note that aggregates M&A activity, notable developments, regulatory changes, and conferences we deem to be of interest to our partners. It is a quick afternoon read and an easy way to keep your finger on the pulse of the healthcare space. Please fill in your name and email address below if you wish to subscribe.