Last week, Express Scripts – a pharmacy benefit manager (PBM) – announced that it has reached an agreement to acquire eviCore – a medical benefit manager (MBM) – for $3.6 billion. eviCore manages medical benefits for 100 million people in areas of radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology. Express Scripts is the largest PBM in the nation and its acquisition of eviCore means a rapid advance into the world of MBM, a large and growing market. While our pharmacy spending is $400 billion, healthcare spend represents nearly $3.4 trillion, so the acquisition is an attractive entry point into an extremely lucrative market.
In its announcement, Express Scrips stressed that the acquisition will improve its ability to address $1 trillion annual spending on unnecessary healthcare. To remind, this year, Express Scripts lost its biggest client, Anthem, for allegedly inflating the drug pricing. Anthem has filed a law suit against Express Scripts for $15 billion that it overspent on prescription drug prices for its members while Express Scripts was managing prescription drug benefits for its beneficiaries.
The deal with eviCore is conditioned on all regulatory approvals and is expected to close by the end of 2017.