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WellPoint NextRx to be Acquired by Express Scripts
Apr 14, 2009
WellPoint NextRx Subsidiaries for $4.675 Billion
April 13, 2009, Express Scripts, Inc. and WellPoint, Inc. announced that they have signed a definitive agreement under which Express Scripts, one of the largest pharmacy benefits management (PBM) companies in North America, will acquire WellPoint's NextRx subsidiaries for $4.675 billion, which includes consideration for the value of a future tax benefit for Express Scripts based on the structure of the transaction.
WellPoint NextRx subsidiaries provide PBM services to approximately 25 million Americans and manage more than 265 million adjusted prescriptions annually. The transaction includes a 10-year contract for Express Scripts to provide services to WellPoint, one of the nation's largest health benefits companies, following closing of the transaction.
"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," added Paz.
"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."
Braly added, "WellPoint continues to be an industry leader in providing integrated medical and pharmacy benefits. This relationship with Express Scripts will strengthen and accelerate our ability to execute on our integrated health benefits model."
Both companies have impressive track records of successful integrations, resulting in exceptional member satisfaction and client retention. The transition to Express Scripts' platform and products will be staged to ensure consistency of benefits and pharmacy services to members. WellPoint will retain control of medical policy, formulary and integrated disease management, and will work alongside Express Scripts to offer best-in-class pharmacy management and data analytics. WellPoint members will gain access to better Web, home delivery and customer service capabilities, and clients will benefit from enhanced reporting.
The transaction is expected to close in the second half of 2009, subject to customary closing conditions and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
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