Well folks, Rite Aid is back in the game of pharmacy benefit management! The sale of EnvisonRx, a mid-sized privately-held PBM with approximately 10 million lives under management, was announced today. Rite Aid will make the acquisition at a purchase price of $2 billion, made up of $1.8 billion in cash and $200 million in stock. EnvisionRx is owned by private equity firm TPG, who acquired the PBM in July 2013.
Rite Aid said all the “right” things. They described how this acquisition makes perfect sense and will create a synergistic health services entity with the right platform, yada, yada, yada. It remains to be seen what the new company will be able to do to help prescription benefit plan sponsors reduce prescription drug costs. We at WBC are intrigued!
Some of our more “seasoned” readers may recall the former Rite Aid / PBM marriage that competed in this prescription benefit management arena under the Eagle Managed Care brand, with checkered results. Granted, Rite Aid was run by an entirely different management team with very “different” management objectives, and the relationship was not always a good one. In 1998, Rite Aid came under fire from the State of Pennsylvania’s Medicaid program for managed care. The state accused the pharmacy outlet of a significant conflict of interest in its dual position as a large retail chain and as a PBM that negotiated reimbursement rates with pharmacies. This duality is one that CVS/Caremark has mined effectively over the years and we’re sure Rite Aid feels confident that they can enhance their overall results as well. It clearly helps EnvisionRx become more of a competitor in the shark tank of securing new PBM service contracts. particularly when it comes to pricing, rebates and mail order capabilities. Time will tell. Stay tuned!