Express Scripts Deal to Buy WellPoint's Pharmacy Business Could Bring Savings to Customers

The acquisition by Express Scripts of the pharmacy benefits management businesses of health insurer WellPoint Inc. for $4.68 billion is expected to bring considerable negotiating clout to the company, potentially resulting in savings for its customers buying prescription drugs. As a result of the deal, Express Scripts, the third-largest pharmacy benefits manager, will likely vault past No. 2 CVS Caremark and challenge Medco Health Solutions Inc. for the top spot. However, experts question whether this transaction will directly impact Medco's position.

Key Takeaways:

• The $4.68 billion deal between Express Scripts and WellPoint's NextRx subsidiaries gives Express Scripts significant negotiating power, potentially leading to savings for customers.
• The deal likely propels Express Scripts past CVS Caremark to become the second-largest pharmacy benefits manager, putting it in close competition with Medco Health Solutions Inc.
• Medco's diverse customer base and its large number of employer and insurance company clients make it unlikely that the deal will have a direct impact on Medco.
• Experts believe the WellPoint deal may inspire other health insurance companies to consider selling their pharmacy benefit units, which could be a growth opportunity for Medco.
• United Health Group is seen as a potential candidate for a sale to Medco, which is already its largest customer.
• The acquisition could lead to increased competition in the pharmacy benefits management market, driving prices down and offering customers more affordable options.

Statistics:

• The deal is valued at $4.68 billion.
• Express Scripts is the third-largest pharmacy benefits manager.
• The acquisition will likely vault Express Scripts past CVS Caremark into the second spot.
• Medco Health Solutions Inc. manages a large number of prescriptions, making it a significant player in the industry.
• United Health Group is Medco's largest customer.
• 90% of Americans rely on prescription assistance programs.

Sources:

• The Associated Press, "Express Scripts to buy WellPoint's pharmacy business for $4.68 billion" (no date provided)