Health

UnitedHealth Bulks Up for Prescription Drug Cost Battle

Published

10 years ago

March 31, 2015

This Tuesday, Oct. 16, 2012, file photo, shows a portion of The UnitedHealth Group Inc.’s campus in Minnetonka, Minn. The nations largest health insurer, UnitedHealth, is staking a bigger claim in pharmacy benefits management with a plan to buy Catamaran Corp., for more than $12 billion in cash, the company announced, Monday, March 30, 2015. (AP Photo/Jim Mone)

TOM MURPHY, AP Business Writer

The nation’s largest health insurer, UnitedHealth, will muscle up for its fight against rising prescription drug costs by spending more than $12 billion to buy pharmacy benefits manager Catamaran Corp.

Pharmacy benefits managers, or PBMs, help negotiate the prices that customers pay for prescription drugs. They are seen as a key component in the push to contain soaring costs from specialty drugs, complex medicines that can represent treatment breakthroughs but often at a much higher price than other drugs.

Rising costs from these drugs are expected to affect more patients as use of the treatments grows and coverage for them shrinks.

UnitedHealth and Catamaran said Monday that their deal will combine businesses that have “distinctive, rapidly growing specialty pharmacy services” for a segment of the market that is expected to quadruple from an estimated $100 billion in revenues last year to possibly $400 billion by 2020.

Specialty drugs treat certain forms of cancer, multiple sclerosis and hepatitis C, among other conditions. They have always been pricey but confined to relatively small patient populations. That’s changing, due in part to some newer hepatitis C treatments that could be used by millions of patients.

Nearly 32 cents of every dollar spent on prescriptions now goes toward a specialty drug, according to the nation’s largest pharmacy benefits manager, Express Scripts Holding Co. That’s up from 12 cents of every dollar spent in 2009.

PBMs run prescription drug plans for employers, insurers and other customers. They have been countering rising specialty drug costs by requiring patients to try other treatments first or by doing more care management to make sure customers stay on their medicines. They also can use the leverage that comes from their size to negotiate coverage restrictions that lower costs.

St. Louis-based Express Scripts, which filled about 1.3 billion prescriptions last year, said in December that it will no longer cover Sovaldi and Harvoni — two Gilead Sciences Inc. drugs that cost more than $80,000 each for a full course of treatment — or Johnson & Johnson’s Olysio for some customers except under limited circumstances.

Instead, it made AbbVie Inc.’s Viekira Pak its preferred treatment.

PBMs generally don’t detail the price breaks they get from these negotiations, and the difference may not filter entirely down to patients. More payers are making customers pay more out of pocket for specialty drugs before coverage of the medicines kicks in.

The combination of UnitedHealth Group Inc.’s OptumRx PBM business and Catamaran will create a PBM that fills around 1 billion prescriptions annually.

The deal is a “material first step” for both companies in understanding how to contain costs from these newer drugs, said Steve Brozak, who covers the pharmaceutical industry as president of WBB Securities.

Acquisitions have been a key means of growth in the PBM sector for years. In 2012, Express Scripts became the nation’s largest PBM by completing a $29.1 billion acquisition of rival Medco Health Solutions. That same year, Catamaran changed its name from SXC Health Solutions after spending more than $4 billion to buy another PBM, Catalyst Health.

UnitedHealth said Monday that, for the latest deal, it will spend $61.50 in cash on each share of Catamaran. That’s a 27 percent premium to Catamaran’s closing price Friday.

Catamaran, based in the Chicago suburb of Schaumburg, Illinois, had about 207.5 million shares outstanding at the end of January, which puts the deal price at roughly $12.76 billion.

The deal is expected to close during the fourth quarter.

Shares of Catamaran rose 24 percent, or $11.61, to $59.93 Monday in midday trading, while broader indexes also advanced around 1 percent. UnitedHealth, based in Minneapolis, also saw its shares climb 2.6 percent, or $3.11, to $121.12.

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Related Topics:cancer Catamaran Hepatitis C multiple sclerosis prescription drugs UnitedHealth

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LIVE! — TOWN HALL ON RACISM AND ITS IMPACT — THURS. 11.14.24 5PM PST

Join us for a LIVE Virtual Town Hall on the Impact of Racism hosted by Post News Group Journalist Carla Thomas and featuring Oakland, CA NAACP President Cynthia Adams & other Special Guests.
Thursday, November 14, 2024, 5 p.m. – 6:30 p.m. PST

Published

1 week ago

November 12, 2024

Oakland Post

Discussion Topics:
• Since the pandemic, what battles have the NAACP fought nationally, and how have they impacted us locally?
• What trends are you seeing concerning Racism? Is it more covert or overt?
• What are the top 5 issues resulting from racism in our communities?
• How do racial and other types of discrimination impact local communities?
• What are the most effective ways our community can combat racism and hate?

Your questions and comments will be shared LIVE with the moderators and viewers during the broadcast.

STREAMED LIVE!
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NAACP California-Hawaii State Convention Highlights Black Voter Engagement, and More

A Friday panel featuring NAACP Chairman Leon W. Russell and Regina Wilson, Executive Director of California Black Media, examined Project 2025, an initiative perceived as a potential threat to civil rights, healthcare access, and environmental protection. This session emphasized Project 2025’s projected impact on Black communities, noting that policies within the initiative could diminish gains in civil and environmental rights over decades. Russell and Wilson highlighted the need for vigilant monitoring and community mobilization to address these challenges.

Published

2 weeks ago

November 4, 2024

Oakland Post

NAACP State Conference President Rick Callender (right) engages in a discussion on voter engagement and community advocacy with NAACP President and CEO Derrick Johnson during the 37th NAACP California-Hawaii State Convention in Los Angeles. Photo by Rich Woods.

By Bo Tefu, California Black Media

The 37th NAACP California-Hawaii State Convention concluded on Sunday, Oct 27, following four days of discussions and workshops at the Los Angeles Airport Marriott. Bringing together civil rights leaders, policymakers, and advocates from California and Hawaii, the convention operated under the theme “All In.” The participants discussed critical issues impacting Black communities, including criminal justice reform, health equity, economic empowerment, education, environmental justice, and voting rights.

On Saturday, the President’s Fireside Chat brought together NAACP President Derrick Johnson and CA/HI State Conference President Rick Callender, who discussed the urgency of voter engagement and community advocacy.

Guest speakers included Congresswoman Maxine Waters (D-CA-43), who spoke at the Women in NAACP (WIN) Labor Luncheon about the intersection of labor rights and civil rights. California State Superintendent Tony Thurmond delivered remarks at the Leadership Dinner on education equity, focusing on policies to ensure all students have access to high-quality education.

Honors were given to longtime social justice advocate and former Assemblymember Mike Davis for his work in community activism. At the same time, actor and activist Danny Glover and the Rev. Dr. Amos C. Brown received the 2024 Legacy Hall of Fame Awards, recognizing their lifelong commitments to advancing civil rights.

The convention also offered practical workshops, including “What’s On Your Ballot?,” where coalition leaders provided analyses of California propositions, explaining their potential impacts on community rights and resources. The Voter Turnout Workshop provided background and encouraged participants to promote voter turnout through community-centered outreach strategies.

Sunday’s events closed with a Prayer and Memorial Breakfast honoring the contributions of past and current civil rights leaders.

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Atty Gen Bonta: U.S. Law Mandating Emergency Care to All Patients Faces Threats

The attorney general highlighted that EMTALA is vital for ensuring that no individual is turned away from emergency services based on financial status or insurance coverage. Bonta stated that the law has been a cornerstone of emergency healthcare for decades, providing peace of mind to millions of Americans who might otherwise hesitate to seek urgent medical attention due to cost concerns.

Published

3 weeks ago

November 3, 2024

Oakland Post

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By Bo Tefu, California Black Media

California Attorney General Rob Bonta emphasized the critical need to protect the Emergency Medical Treatment and Labor Act (EMTALA), mandating that hospitals provide emergency care to all patients regardless of their ability to pay.

In a recent statement, Bonta highlighted the potential threats to this essential legislation amid ongoing discussions about healthcare accessibility in the U.S.

“EMTALA ensures that no one is denied access to emergency medical care, including abortion care, and this federal law is more imperative than ever following the overturn of Roe v. Wade,” said Bonta.

This decision to support the federal government’s case comes at a time when many healthcare providers are facing pressure from rising costs and legislative changes that could undermine existing protections. Bonta called on lawmakers to reinforce EMTALA’s provisions and to combat any efforts aimed at weakening the act, asserting that equitable access to emergency care is a fundamental right.

He urged state and federal governments to ensure that all Americans, particularly marginalized communities, have the necessary access to emergency services without fear of financial repercussions. The brief indicates the coalition’s commitment to healthcare equity, emphasizing that maintaining strong protections under EMTALA is crucial for safeguarding public health.

As discussions around healthcare policy continue, Bonta remains steadfast in promoting initiatives that protect emergency care access, asserting that everyone deserves timely and appropriate medical treatment in emergencies. His efforts align with ongoing legal and advocacy battles to preserve the rights established by EMTALA in the face of evolving healthcare challenges.