Express Scripts to Buy eviCore for $3.6B
Deal accelerates Express Scripts shift away from fee-for-service to value-based care; establishes platform to advance medical benefits management services.
Express Scripts today announced that it will pay $3.6 billion to acquire eviCore, the privately held medical benefits management company.
"Together with eviCore,Express Scripts will be an even more powerful partner in managing costs for patients and payers, bringing us closer to our goal of becoming the nation's leading patient benefit manager," Tim Wentworth, president and CEO of Express Scripts, said in a media release.
"By further strengthening our independent model and creating numerous opportunities for growth, the acquisition of eviCore will deliver value for our clients, patients, providers, and shareholders," Wentworth said.
The deal is subject to regulatory approval, but is expected to be completed by the end of 2017.
"The greatest opportunity to improve healthcare is by reducing wasteful spend and overutilization while delivering quality outcomes," said eviCore Chairman and CEO John Arlotta. "Together, eviCore and Express Scripts will be uniquely positioned to tackle these problems."
Bluffton, SC-based eviCore contracts with health plans and commercial clients to manage medical benefits for 100 million people in areas that include radiology, cardiology, musculoskeletal disorders, post-acute care and medical oncology. The company has approximately 4,000 employees and will operate as a standalone business within Express Scripts.
St. Louis-based Express Scripts, the nation’s largest pharmacy benefits manager, said the acquisition provides "an attractive entry point into a growing market."
"Today, pharmacy is an industry with approximately $400 billion in annual spend. Healthcare spend represents nearly $3.4 trillion. Medical benefit management is a large and growing market with more than $300 billion spent annually in the areas eviCore manages today," the company said. "Establishing a cornerstone platform in this market will enable Express Scripts to build a uniquely comprehensive suite of solutions, with significant opportunities for cross-selling to both client bases."
Express Scripts said the cost containment capabilities and expanded client base achieved in the acquisition "will create an even more powerful partner for our clients, fully aligned with the interests of patients and payers."
"This will further differentiate Express Scripts and position the company to take advantage of the transition to value-based care and the increasing demand from payers for a more comprehensive set of service offerings and solutions," the company said.
eviCore investors include General Atlantic, TA Associates, and Ridgemont Equity Partners.