Express Scripts to buy WellPoint units for $4.68B

Prescription benefits manager Express Scripts esrx said Monday it is buying health insurer WellPoint's wlp pharmaceutical benefit management subsidiaries for just under $4.68 billion.

The buyout of WellPoint's NextRx subsidiaries includes a consideration for the value of a future tax benefit for Express Scripts, based in St. Louis.

The transaction includes a 10-year contract for Express Scripts to provide services to WellPoint following closing of the transaction.

"Our aligned business model, combined with the complementary expertise and capabilities of WellPoint, creates significant opportunities for accelerated growth for both organizations," said Express Scripts Chairman and Chief Executive George Paz.

The NextRx subsidiaries provide pharmaceutical benefit management services to about 25 million Americans and manage more than 265 million prescriptions annually.

The companies expect the deal to close in the second half of 2009.

WellPoint is the nations largest insurer by enrollment and is coming off of a rough 2008. The company and its peers have been hurt by investment losses and rising unemployment due to the recession. Higher medical costs have also been eating away at profit.

In 2008, WellPoint's enrollment rose less than 1% while profit fell more than 25%. The company has warned that rising unemployment and falling enrollment will hurt revenue in 2009.

In February, the company said medical enrollment could fall 3%, or by about 1 million members, to 34 million people, while fully insured enrollment drops an estimated 6% to 15.5 million.

Express Scripts has been benefiting from the use of generic drugs, which are more profitable for the company than brand-name drugs. During the fourth quarter of 2008, generic drug use rose to 67.3% from 63.7% for the company. In 2008, profit rose nearly 37%.

Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
You Might Also Like...
See It, Share It
PHOTO: U.S. Customs and Border Protection officers at the George Bush Intercontinental Airport in Houston stopped a would be smuggler from bringing nearly 7 ounces of cocaine into the country in tamales, Aug. 22, 2014.
U.S. Customs and Border Protection
Real Housewife Phaedra Parks Lists Home in Suburban Atlanta
Real Housewives of Atlanta star, Phaedra Parks, has listed her 4,000-square-foot home with 5 bedrooms and 6 baths for $340,900.
In this image from video posted on Facebook, courtesy of the George W. Bush Presidential Center, former President George W. Bush participates in the ice bucket challenge with the help of his wife, Laura Bush, in Kennebunkport, Maine.
(Courtesy George W. Bush Presidential Center/AP)