Express Scripts (NASDAQ: ESRX) didn’t hedge its bets that online retail giant Amazon will enter the prescription drug delivery market. On October 10, the leading pharmacy benefit manager (PBM) acquired South Carolina-based eviCore healthcare from its current investors, including General Atlantic, TA Associates, and Ridgemont Equity Partners, for $3.6 billion.
The deal follows rumors that Amazon is contemplating entering the prescription drug delivery market in an attempt to improve price transparency for consumers and reduce out-of-pocket costs. Last April, Express Scripts lost Anthem, Inc. (NYSE: ANTM) as a client, and with it, 18% of annual revenue. The threat of competition coupled with the significant blow to its customer base pushed the PBM to diversify its current offerings.
eviCore healthcare is a medical benefits management (MBM) company that develops and operates evidence-based cloud centric healthcare solutions for managed care organizations, self-insured entities, and risk-bearing provider organizations. The company manages benefits for 100 million people and has leading positions in categories including radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology.
Combining Express Scripts’ PBM offering and eviCore’s complementary MBM platform will create a comprehensive patient benefit management solution. eviCore has leading positions managing benefits in categories including radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology.
MBM is a growing market with more than $300 billion spent annually in the areas eviCore manages today. Establishing a foundating in this market will provide Express Scripts with opportunities for cross-selling to both client bases.
eviCore was formed by the merger of General Atlantic LLC’s CareCore National LLC with Franklin, Tennessee-based MedSolutions Holdings Inc., a portfolio company of TA Associates and Ridgemont, in December 2014. Renamed eviCore, the company acquired Boston-based QPID Health for an undisclosed price in February 2016. QPID’s technology combines natural language-processing clinical logic and machine learning, a handy addition to MedSolutions’ focus on medical benefits management.
