Express Scripts Holding Co. agreed to pay $3.6 billion to acquire closely held EviCore Healthcare, a company that preapproves scans and other costly medical tests for health plans.
The deal comes as Express Scripts, a pharmacy benefit manager (PBM), is facing challenges on a number of fronts, including the possible loss of its largest customer, health-insurance giant Anthem Inc., and the potential entry of Amazon.com Inc. into the business of managing prescription-drug benefits.
Shares of Express Scripts, which have shed more than 15% of their value so far this year, fell 2.1% to $57.97 at 11:37 a.m. in New York.
What Your Peers Are Reading
Buying EviCore will help Express Scripts broaden its reach beyond prescription drugs into being a gatekeeper for insurance companies for a wider range of medical services. Health plans hire EviCore, which manages medical benefits for 100 million people, to help reduce medically unnecessary imaging and other expensive tests.
The purchase will complement Express Scripts’ main business of managing prescription-drug benefits for health plans, employers and unions. The combination provides “significant opportunities for cross-selling to both client bases,” Express Scripts said in a statement.
Express Scripts said that the deal, which must be approved by regulators, is expected to close in the fourth quarter of 2017. EviCore will be run as a standalone business unit within Express Scripts, the company said.
Express Scripts shares have been under pressure recently amid renewed speculation that Amazon.com could move into pharmacy benefits, a development that could threaten Express Scripts and rivals including CVS Health Corp. and UnitedHealth Group Inc.’s OptumRx. Together, the three companies process about 70% of prescriptions in the U.S., according to Pembroke Consulting.