Managed Care


Another PBM Sold As Express Scripts Buys Diversified

MANAGED CARE March 1999. © MediMedia USA
News and Commentary

Another PBM Sold As Express Scripts Buys Diversified

MANAGED CARE March 1999. ©1999 Stezzi Communications

Express Scripts has agreed to purchase a rival pharmacy benefit manager, Diversified Pharmaceutical Services, for $700 million. When the transaction is completed, Express Scripts will double its membership to 46 million, solidifying its position as the third-largest PBM.

SmithKline Beecham's sale of Diversified marks the second time in three months that a pharmaceutical maker has divested itself of a PBM at a substantial loss. Late last year, Eli Lilly & Co. sold financial weakling PCS Health Systems, the nation's largest PBM, to Rite Aid for $1.5 million — $2.5 million less than it paid for it. Diversified's price is a third of what it cost SmithKline in 1994.

Both sales come as the Food and Drug Administration is starting to clamp down on promotional claims by PBMs that are owned by drug companies.

The timing of the Diversified sale is also interesting in that the PBM is near a turning point. Contract language in United HealthCare's 1994 sale of Diversified that required the HMO to continue to use Diversified as its PBM for several years will expire shortly.

The second-largest PBM, Medco, is owned by Merck & Co. Merck has no plans to sell its highly profitable subsidiary.


2014 Annual HEDIS® and Star Ratings Symposium Nashville, TN November 3–4, 2014
PCMH & Shared Savings ACO Leadership Summit Nashville, TN November 3–4, 2014
Medicare Risk Adjustment, Revenue Management, & Star Ratings Fort Lauderdale, FL November 12–14, 2014
World Orphan Drug Congress Europe 2014 Brussels, Belgium November 12–14, 2014
Healthcare Chief Medical Officer Forum Alexandria, VA November 13–14, 2014
Home Care Leadership Summit Atlanta, GA November 17–18, 2014
6th Semi-Annual Diagnostic Coverage and Reimbursement Conference Boston December 4–5, 2014
Customer Analytics & Engagement in Health Insurance Chicago December 4–5, 2014
Pharmaceutical and Biotech Clinical Quality Assurance Conference Alexandria, VA December 4–5, 2014
9th Semi-Annual Medical Device Coverage and Reimbursement Conference San Diego December 5, 2014
8th Annual Medical Device Clinical Trials Conference Chicago December 8–9, 2014
HealthIMPACT Southeast Tampa, FL January 23, 2015