Express Scripts to acquire WellPoint's NextRx businesses in $4.7B deal

By Eric Wicklund
11:00 AM

Express Scripts, Inc., is boosting its pharmacy benefit management business with the planned acquisition of the WellPoint’s NextRx subsidiaries.

The $4.675 billion deal, announced Monday, brings together one of the nation’s largest PBM providers in St. Louis-based Express Scripts with one of the country’s biggest health benefits companies. Indianapolis-based WellPoint, an independent licensee of the Blue Cross and Blue Shield Association, serves roughly 35 million members in the country.

"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, in a press release announcing the deal. "As healthcare 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 healthcare 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."

WellPoint’s NextRx subsidiaries provide PBM services to roughly 25 million people in the United States and manage more than 265 million prescriptions each year. Those businesses will be folded in Express Scripts’ network of integrated PBM services, including network-pharmacy claims processing, home delivery services, benefit-design consulting, drug use review, formulary management and medical and drug data analyses.

"Now more than ever, as the nation focuses on healthcare 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, in the press release. "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," he added.

The transaction is expected to close during the second half of 2009, subject to customary conditions. The deal includes consideration for the value of future tax benefit for Express Scripts based on the structure of the transaction.