Prime Therapeutics is acquiring Magellan Rx to advance integrated specialty drug management, accelerating efforts to lower the cost of drugs and improve health outcomesMay 5, 2022
EAGAN, Minn. – Pharmacy benefit manager Prime Therapeutics LLC (Prime) on May 3 entered into a definitive agreement with Centene Corporation to acquire Magellan Health, Inc.’s pharmacy business, Magellan Rx Management, (Magellan Rx) for approximately $1.35 billion.
“This is a timely and important move,” said Ken Paulus, CEO and president of Prime Therapeutics. “As pharmacy costs balloon, bold action is necessary. By bringing together the capabilities and talents of Prime and Magellan Rx, we are positioned to deliver breakthrough value to the clients and members we serve. We are excited about the solutions our shared teams will bring to the industry as we strive to deliver progress against the Quadruple Aim.”
Magellan Rx brings nearly two decades of total specialty drug management expertise managing the most complex patient populations across both the pharmacy and medical benefit. As pioneers in medical pharmacy management, Magellan Rx offers industry-leading specialty solutions that serve more than 16 million members. With more than 40 years’ experience, including implementing the country’s first preferred drug list (PDL) over 20 years ago, Magellan Rx is the sought-after expert helping 28 states and Washington, D.C. with leading Medicaid and state pharmacy program administration solutions.
For more than 20 years, Prime has been making health care work better by helping millions of people get the medicine they need to feel better and live well. Prime offers utilization management, network management, claims processing, and patient-centric clinical programs to more than 33 million Americans. Last year Prime processed nearly 400 million pharmacy claims.
“Prime is uniquely positioned to deliver differentiated pharmacy benefits solutions to the market and this transaction is reflective of our commitment to invest in its platform to continuously expand and improve its capabilities” said Maurice Smith, Chairman of the Board of Prime Therapeutics and President and CEO of Health Care Service Corporation (HCSC).
Prime and Magellan Rx will bring value to all stakeholders the two organizations serve through aligned philosophies centered around transparency, member-centricity, and commitment to maintaining the highest clinical standards. Combining Prime’s fully transparent and channel-independent model with Magellan Rx’s industry-leading portfolio of medical pharmacy solutions is expected to create a new specialty drug management model — one that uniquely aligns and integrates with providers and harnesses the patient and provider relationship to meet patients where they are in their care journey.
“We are thrilled to be joining forces with Prime as we usher in the next chapter of our company’s evolution,” said Mostafa Kamal, CEO, Magellan Rx Management. “This is a strategic combination that will accelerate our work in bringing next-generation pharmacy solutions to market, creating an even more powerful value proposition for the customers and members we serve.”
For the foreseeable future, Magellan Rx will operate as a stand-alone business unit under Prime to ensure continuity with its current customers, while simultaneously bringing the value of its solutions to Prime’s owners and plan sponsors. Prime and Magellan Rx are deeply committed to serving Magellan Rx’s existing segments, including its Medicaid administration, PBM and specialty drug management businesses.
The transaction is subject to clearance under the Hart-Scott Rodino Act and receipt of required state regulatory approvals, with an anticipated closing date later this year.
Solomon Partners is serving as exclusive financial advisor and placement agent to Prime and McDermott Will & Emery and Fox Rothschild LLP are serving as its legal counsel. Allen & Company LLC and Evercore are serving as financial advisors to Centene, and Skadden, Arps, Slate, Meagher & Flom LLP is serving as its legal counsel.
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