Wellpoint PBM for Sale

Not that it wasn’t known, but the rumor is now out on the street.  Wellpoint is putting their PBM on the market.

How do you value it…It’s difficult. The question is how long of a contract will Wellpoint sign with the acquirer and will they plan to keep any of their assets – mail pharmacies, call centers, claims systems, etc.  But that’s not it.  You also have to understand how many of their contracts are going to be up for renewal and when.  PBM contracts with payors are usually 2-3 years so that would likely be much less time than Wellpoint would commit to.

Who will buy them? Everyone seems to think CVS Caremark, Medco, or Express Scripts.  Why not Walgreens, Wal-Mart, or Prime Therapeutics?

I can’t imagine CVS Caremark buying them after the Longs and RxAmerica acquisition.  Medco doesn’t usually buy PBM lives.  And, both of them are more focused on building out a healthcare solution than growing the traditional PBM offering.  So, of the top 3, I would have to predict my old employer – Express Scripts.  I guess that’s a way to grow quickly.

An acquisition by Prime who is owned by the non-profit BCBS plans would be interesting to begin to consolidate the payors under one PBM, but I doubt that’s the likely suitor.  It will be interesting to see how this plays out.

2 Responses to “Wellpoint PBM for Sale”

  1. This is more significant than Medco and United because of the fact that United owns Prescription Solutions as well, so Medco gets no Part D lives. Based on the press releases by both organizations when United and Medco were looking to part ways, Medco is nothing more than an administrator for United. The NextRx deal will make ESI (front-runner per WSJ) the largest PBM in the country.

  2. Medco has purchased lives in the past (e.g., SysteMed, ProVantage). Both Medco and Express Scripts have a significant presence in the health plan space. Maybe they are looking at a deal similar to Medco and United.

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