UnitedHealth buys Catamaran for $12 billion
Schaumburg-based Catamaran Corp., a growing company that pharmacies use to check on a consumer's eligibility for prescriptions, has agreed to be acquired by OptumRx, UnitedHealth Group's pharmacy care services business, for about $12.8 billion.
UnitedHealth aims to bulk up its drug-benefits business to get better negotiating power in its talks with pharmaceutical companies over prices, experts said.
How the deal will affect Catamaran's 4,000 workers and 50 offices nationwide, including its Schaumburg headquarters, is still unknown. Catamaran spokeswoman Lauren Denz would not provide further comment and only referred to a statement by Catamaran Chairman and CEO Mark A. Thierer, a Barrington resident. He will lead the combined company, which will retain the OptumRx name.
"Together, we believe we will have the talent, scale, technology resources and innovative spirit to build the most modern, effective and consumer-focused PBM in the history of the industry," Thierer said in a statement.
The deal is expected to be completed later this year.
Catamaran, named a Fortune Fastest-Growing Company from 2010 through 2014, manages more than 350 million prescriptions annually on behalf of more than 32 million members. It processes one in every five prescription claims in the United States and is the fourth largest pharmacy benefits manager nationwide, said Catamaran's website.
Benefits managers like Catamaran help administer the drug coverage in health plans, working with employers and insurers to negotiate with drug companies and pharmacies. They also often oversee patients' drug use, maintaining lists of covered drugs and handling mail orders or complex treatments.
Originally called SXC Health Solutions Corp., the company was based in Lisle. It later moved its headquarters to Schaumburg and changed its name to Catamaran. SXC had acquired a number of companies in recent years, including Catalyst Health Systems for $4.4 billion in 2012. It also made a major acquisition of NMHC in 2008. That acquisition was the springboard for SXC into the full-service Pharmacy Benefit Manager business, or PBM.
That means the company's importance can be found on the pharmacy insurance card that many people hold in their wallet. It's the company that a pharmacy uses to check on a consumer's eligibility.
Thierer joined SXC as president and chief operating officer in 2006 and became SXC's CEO in 2008. His background includes CaremarkRx, now Caremark Corp., and led that company into becoming a leading PBM and specialty pharmacy company.
He also led the transformation of Physicians Interactive, a division of Allscripts Healthcare Solutions Inc., a provider of electronic health records, ePrescribing and IT solutions for physicians. As president, he repositioned the company from a provider of electronic detailing to a full-service provider of online marketing and educational tools for physicians.
The drug-benefits industry gets about $100 billion in annual sales, a figure that may quadruple by 2020, the companies said. Even with the acquisition, Minnetonka, Minnesota-based UnitedHealth will remain third in the industry behind Express Scripts and CVS Health Corp. in revenue, according to data compiled by Bloomberg.
Catamaran gets about a third of its revenue from Cigna Corp., a rival to UnitedHealth in the insurance business. By joining with UnitedHealth, Catamaran increases the risk that Cigna will end the relationship to avoid helping one of its chief competitors, Peter Costa, an analyst at Wells Fargo & Co., said in a research note.
• Bloomberg News contributed to this report.