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2441 Warrenville Road, Suite 610 Lisle, IL 60532-3642

Susan Fleming, Vice President, Marketing

Phone: (630) 577-4880

http://www.catamaranrx.com/

Catamaran offers a true alternative to the status quo in pharmacy benefit management. You don't have to choose between the scale and purchasing power of the largest providers and the flexibility and agility of smaller ones. We offer the best of both.

At Catamaran, we put your individual needs - and those of your members - at the center of our services. We connect pharmacists, doctors and caregivers with prescription data to improve health outcomes, offering the clinical intelligence, technology and scale to lower payer costs while improving member health.

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UnitedHealth to buy pharmacy benefit firm Catamaran for $12.8 billion

By Sneha Banerjee (Reuters) - Health insurer UnitedHealth Group Inc agreed to buy Catamaran Corp in a deal worth about $12.8 billion to boost its pharmacy benefit business as it competes with bigger rivals such as Express Scripts Holdings Co . Pharmacy benefit managers (PBM) administer drug benefits for employers and health plans and run large mail order pharmacies, helping them get better prices from drugmakers. As employers look to cut prescription costs on expensive drugs, the deal with Catamaran will give UnitedHealth's pharmacy benefits unit, OptumRx, the scale to negotiate favorable prices from pharmacy companies. U.S. drug prices rose 12 percent in 2014 due to a new treatment for hepatitis C that cost more than $80,000 but cured almost all recipients with few side effects. Another new class of drugs, to treat high cholesterol, is expected to hit the market in 2015 and has insurers worried about drug costs this year as well. The purchase of Catamaran will increase UnitedHealth's market share to 15 percent to 20 percent of the people who receive their drug benefits through pharmacy benefit managers, BMO Capital Markets analyst Jennifer Lynch said in a research note. With a combined 1 billion scripts annually, UnitedHealth will be about the same size as current industry number two, CVS Health Corp , she added. Catamaran was formed after SXC Health Solutions and PBM Catalyst Health Solutions merged in 2012. UnitedHealth's offer of $61.50 per share represents a premium of 27 percent to Catamaran's Friday close on the Nasdaq. Catamaran's stock was trading at $60.01 premarket on Monday, while UnitedHealth was up nearly 4 percent. The deal "makes sense to us, but admittedly came much earlier than we expected," Jefferies analyst Brian Tanquilut said in a research note. "We had always viewed Catamaran as a compelling asset for companies looking for scale in the PBM sector such as Optum or Walgreens but expected Catamaran to grow the business much further before pursuing a sale." He added that the offer seemed adequate and he did not expect competing bids at this point. The deal value is based on Illinois-based Catamaran's total diluted shares outstanding as of Dec. 31. The transaction is expected to close in the fourth quarter of 2015 and add about 30 cents per share to UnitedHealth's profit in 2016, the companies said. Catamaran Chief Executive Officer Mark Thierer will be CEO of OptumRx and OptumRx CEO Timothy Wicks will become president. (Additional reporting by Caroline Humer in New York; Editing by Savio D'Souza, Saumyadeb Chakrabarty and Meredith Mazzilli)

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PBMs OptumRx, Catamaran to merge in $12.8 billion deal

March 30, 2015 by Chain Drug Review

March 30, 2015 by Chain Drug Review and Chain Drug Review Business · Leading Headlines · Pharmacy · Retail News -->

NEW YORK and SCHAUMBURG, Ill. — Reflecting the ongoing consolidation in the pharmacy benefit management (PBM) sector, UnitedHealth Group plans to acquire Catamaran Corp. in a deal valued at $12.8 billion.

The companies said Monday that Catamaran would integrated into OptumRx, UnitedHealth’s freestanding pharmacy care services business and part of its Optum health services unit. Under the agreement, UnitedHealth will buy Catamaran’s outstanding common stock for $61.50 per share in cash.

Plans call for Mark Thierer, Catamaran’s chairman and chief executive officer, to serve as CEO of OptumRx and Timothy Wicks, the current CEO of OptumRx, to become president. Jeff Park, currently executive vice president of operations for Catamaran, will become chief operating officer for OptumRx. Jeffrey Grosklags, currently the chief financial officer of OptumRx, will continue in that role.

This year, Catamaran is projected to fill more than 400 million prescriptions which, combined with OptumRx’s approximately 600 million annual scripts, will enable the combined entity to be a competitive force in the PBM industry, UnitedHealth and Catamaran said. Enhanced purchasing and administrative improvements also are expected to drive value, with most of savings expected to directly benefit clients and individuals via reduced costs for prescriptions and enhanced pharmaceutical services, the companies added.

The PBM sector is led by No. 1 Express Scripts Inc., which merged with rival Medco Health Solutions in 2012, and No. 2 CVS Health, which created an integrated PBM-retail pharmacy business model with the acquisition of Caremark Rx in 2007. OptumRx already was the No. 3 player. Earlier this year, drug chain Rite Aid Corp. entered the PBM business with a $2 billion deal to acquire Envision Pharmaceutical Services (EnvisionRx) .

UnitedHealth and Catamaran noted that the value created for the combined customer base of OptumRx and Catamaran goes beyond scale. The merger brings together the strengths of Catamaran’s industry-leading technology platform with the data and analytics capabilities of Optum, they said, explained that the combined entity will deliver compelling consumer and payer services that link demographic, lab, pharmaceutical, behavioral and medical treatment data and foster more informed health care decisions and improved health outcomes. Both companies also have rapidly growing specialty pharmacy businesses.

“Catamaran’s capabilities are impressive, and their leadership team has delivered the fastest growth in the industry. We believe the combination of the two companies will create a unique offering in the industry unparalleled by current participants,” Optum CEO Larry Renfro said in a statement. “Optum’s longstanding business relationship with Catamaran as a technology partner means we operate on the same adjudication platform, simplifying integration and giving us confidence our combined organizations will quickly become an innovative force moving the pharmacy care services marketplace forward.

“We believe this combination will create significant value for health plan, government, third-party administrator and employer customers and, most importantly, the individual consumers who depend on us for accurate, affordable and convenient pharmacy benefit products and services.”

The transaction is slated to close in the fourth quarter, pending approval by Catamaran shareholders as well as regulatory approvals and other customary closing conditions.

“Our board of directors carefully considered a variety of strategic options and unanimously concluded that this combination is clearly in the best interests of our shareholders,” Catamaran’s Thierer stated. “The creation of a differentiated, channel-agnostic delivery model will provide payers and individuals a broader portfolio of services and a deeper product offering while aggressively focusing on managing costs. 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.”

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UnitedHealth Group to Buy Catamaran in $12.8 Billion Pharmacy Benefits Deal

By David Gelles

• March 30, 2015

Two pharmacy benefits managers are combining forces in an effort to negotiate better deals with pharmaceutical makers, a move that could in theory lead to lower drug prices for consumers.

A unit of the UnitedHealth Group said it had agreed to acquire the Catamaran Corporation in an all-cash deal worth nearly $13 billion, the companies announced on Monday.

UnitedHealth will pay $61.50 a share for Catamaran, a 27 percent premium over Friday’s closing price of $48.32 a share. It is the latest big acquisition in the health care industry, which is in the midst of a surge of deal activity. And it represents a further consolidation of the pharmacy benefits management business.

Last month, Rite Aid, a big pharmacy chain, acquired Envision Pharmaceutical Services , for $2 billion in cash and stock.

Catamaran, which is based in Schaumburg, Ill., will be combined with UnitedHealth’s pharmacy services business, OptumRx. Catamaran manages more than 400 million prescriptions each year on behalf of 35 million people — or about one in every five prescription claims in the United States.

The combined company will face off against other big pharmacy benefits managers, including Express Scripts and CVS Caremark.

“We believe this combination will create significant value for health plan, government, third-party administrator and employer customers and, most importantly, the individual consumers who depend on us for accurate, affordable and convenient pharmacy benefit products and services,” Larry Renfro, chief executive of Optum, said in a statement.

UnitedHealth said the deal would add 30 cents a share to its net earnings in 2016. UnitedHealth plans to finance the acquisition from existing cash resources and new debt.

The deal is subject to approval by Catamaran’s shareholders and regulators, who may take a close look at an increasingly concentrated industry.

But even as it consolidates, the business is growing, too. Managing pharmacy benefits is expected to quadruple to a $400 billion market in 2020, up from $100 billion last year.

Mark Thierer, Catamaran’s chairman and chief executive, will become chief executive of OptumRx, while Timothy Wicks, the current chief executive of OptumRx, will become president.

“Our board of directors carefully considered a variety of strategic options and unanimously concluded that this combination is clearly in the best interests of our shareholders,” Mr. Thierer said. “Together, we believe we will have the talent, scale, technology resources and innovative spirit.”

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UnitedHealth Group buying Catamaran pharmacy benefits manager for $12.8 billion

Catamaran serves about 25 million americans with retail pharmacy network management, mail-order pharmacy, claims management and other services..

Photo of UnitedHealth Group Corporate Headquarters from Facebook

UnitedHealth Group, the nation’s largest insurer, on Monday said it would acquire Catamaran, the country’s fourth-largest pharmacy benefits manager, for $12.8 billion. Under terms of the deal, Schaumburg, Illinois-based Catamaran will merge with OptumRx, the drug management division of UHG’s highly profitable technology and services subsidiary Optum.

In the $12.8 billion deal, expected to close by the end of the year, UHG is paying $61.50 a share, 27 percent more than Catamaran’s closing stock price on March 27.

“Catamaran’s capabilities are impressive and their leadership team has delivered the fastest growth in the industry,” said Larry Renfro, chief executive officer of UGH’s Optum, in a statement. “Optum’s longstanding business relationship with Catamaran as a technology partner means we operate on the same adjudication platform, simplifying integration and giving us confidence our combined organizations will quickly become an innovative force moving the pharmacy care services marketplace forward.”

Mark Thierer, chairman and CEO of Catamaran, said the company’s board considered a range of options for its future and unanimously decided to accept UHG’s offer.

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“The creation of a differentiated, channel-agnostic delivery model will provide payers and individuals a broader portfolio of services and a deeper product offering while aggressively focusing on managing costs,” said Thierer, Catamaran’s CEO since 2006.

Catamaran was founded in 1993 as Systems Xcellence in Toronto, gradually growing through the 2000s after relocating to suburban Chicago and a handful of acquisitions. After buying Catalyst Health solutions in 2012 for $4 billion, the company was renamed to Catamaran.

[Also: Tracking 2015 mergers and acquisitions ]

Renfro said Catamaran and Optum already had similar business strategies. OptumRx uses “clinical synchronization” to connect pharmacy and care management systems, as well as specialized teams to pursue “more consistent and compliant patient outcomes and savings for individuals and plan sponsors,” such as large employers. That approach is particularly important, Renfro said, “given the growth in U.S. spending on specialty pharmaceuticals,” which is driving a wave of drug spending that could top $500 billion by 2020.

Catamaran serves about 25 million Americans with retail pharmacy network management, mail-order pharmacy, pharmacy claims management and patient-centric specialty pharmacy services to health plans and employers. This year, the company will fill about 400 million prescriptions, and when combined with OptumRx, the new company will fill more than 1 billion scripts each year.

Currently, specialty pharmaceuticals account for only 1 percent of all U.S. prescriptions but more than 20 percent, or $100 billion, of national drug spending, and that could rise to $400 billion by the end of the decade, according to UHG. 

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OptumRx and Catamaran Are Latest Players to Consolidate in the PBM Market – How Will Your Pharmacy Be Affected?

UnitedHealth announced an agreement to acquire Catamaran for about $12.8 billion in cash, and is planning to merge the pharmacy benefit manager into its own, free-standing pharmacy benefits business, OptumRx. This deal is expected to close in the fourth quarter of 2015, after shareholder approval, regulatory approval and other customary closing conditions.

This deal is expected to combine the strength of Catamaran’s 400 million prescriptions with OptumRx’s 600 million annual prescriptions to rival the larger players like CVS/Caremark and Express Scripts. The merger is also expected to combine Catamaran’s technology platform with the data and analytics capabilities of OptumRx.

This merger has certain similarities to the Express Scripts and Medco $29.1 billion merger in 2012. This deal created one company filling a combined 1.4 billion prescriptions per year, and Express Scripts used Medco’s technology platform as well. At the time of the deal, Express Scripts and Medco were the largest and third-largest pharmacy benefits managers, respectively. The deal was scrutinized for eight months by the FTC for potential antitrust implications after being approved. However, the effect for pharmacies was that Express Scripts and Medco maintained separate contracts and networks for at least 18 months post-merger.

For specialty and compounding pharmacies, this may mean that the combined PBM may push for decreased reimbursements and may seek to force more patients through mandatory, in-house mail order and specialty pharmacies. In addition, programs initiated and implemented by Catamaran may not carry forward to the merged entity.

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UnitedHealth Group acquires Catamaran for $12.8 billion

UnitedHealth Group’s announcement that its free-standing pharmacy care services business, OptumRx, will merge with Catamaran Corp., the fourth largest pharmacy benefit manager in the U.S., makes sense, according to industry experts.

UnitedHealth Group’s announcement that its free-standing pharmacy care services business, OptumRx, will merge with Catamaran Corp., the fourth largest pharmacy benefit manager (PBM) in the U.S., makes sense, according to industry experts.

UnitedHealth Group  plans to acquire  Catamaran for about $12.8 billion in cash, the Wall Street Journal reported.

“This is a smart acquisition well aligned with UnitedHealth’s strategy-increasing their market power, adding to their suite of technology and benefit management offerings, further diversifying their non-risk business, and better positioning them for the rapidly changing post-ACA delivery system and specialty pharmacy market,” says Kip Piper, MA, FACHE, advisor with Sellers Dorsey , a Medicaid consultancy in Washington, D.C.  “It will increase their already formidable leverage in pharma, biotech, and pharmacy price negotiations. UnitedHealth will no doubt take advantage of the wealth of data, IT savvy, and diverse client base Catamaran brings to the deal.”

This merger is consistent with the types of consolidation being seen within the industry, according to Robert Taketomo, PharmD, MBA, president and CEO, Ventegra .

“However, it remains to be seen in this particular case how the desired efficiencies from scale will impact the ability to adapt to a healthcare environment in flux, and how potential channel conflict with health plan clients will be addressed,” Taketomo says.

The agreement calls for the acquisition of Catamaran’s outstanding common stock for $61.50 per share in cash. The transaction is expected to close during the fourth quarter of 2015, subject to Catamaran shareholders’ approval, regulatory approvals and other customary closing conditions. The combination diversifies OptumRx’s customer and business mix, while accelerating its technology leadership and flexible service offerings.

NEXT: Purchase details

The acquisition is expected to be accretive to UnitedHealth Group’s net earnings in the area of $0.30 per share in 2016. UnitedHealth Group plans to finance the acquisition from existing cash resources and new debt. The company affirmed its $6.00 to $6.25 per share earnings outlook assuming the absorption of all merger costs, the ongoing commitment to advance its dividend policy as planned, and a continued but moderated level of share repurchase.

“It is generally acknowledged that most such takeovers result in a transfer of wealth or value from the acquirer's shareholders to the seller's shareholders. As such, it is a good deal for Catamaran,” says Mark O. Dietrich, CPA/ABV, cpa.net , a certified public accounting firm specializing in healthcare valuation, and author of “The Financial Professional's Guide to Healthcare Reform.” “Initial reaction in the market, however, was positive for United with its share price increasing, so perhaps this deal will be an exception.

“Pharmacy costs represent a significant portion of healthcare spending in the United States, reportedly rising 12% last year, and cost control is critical,” Dietrich adds. “The pharmacy chain CVS controls one large PBM, while its competitor Walgreens sold its PBM. At least from a standard view of economics, it would appear to make more sense to have PBMs under insurer control rather than the control of the industry they attempt to manage the costs of.”

This combination is expected to create a dynamic competitor in the PBM market by combining the strengths of Catamaran’s industry-leading technology platform with the data and analytics capabilities of Optum. The combined company is expected to deliver an innovative and compelling consumer and payer services offering that will link demographic, lab, pharmaceutical, behavioral and medical treatment data to engage individuals to make better decisions as they seek the best, most effective care and improve compliance with pharmaceutical use and care protocols.

Given the business imperatives of post-Affordable Care Act policy and market environment, super low cost of capital, large corporate cash reserves, the increasing power of data and technology, and intense pressures on pricing and cost efficiency, the industry can expect more M&A activity in many segments of healthcare, according to Piper. 

“The marketplace is ripe for further vertical and horizontal consolidations in the drug supply chain and beyond,” Piper says.

“Consolidation leads to fewer choices for the users of PBMs, which of course include managed care executives,” Dietrich says. “Pharmacy costs and formularies are one element of a managed care plan's product design and may contain features regarded as competing with other managed care plans. For plans presently using, for example, United's OptumRx, a competing plan may be using Catamaran. Now, both competing managed care plans would be serviced by the same PBM.”

NEXT: OptumRx's approach

OptumRx’s advanced Clinical Synchronization approach connects pharmacy and care management systems, processes and teams to create deeper insights for higher quality, more consistent and compliant patient outcomes and savings for individuals and plan sponsors. Synchronization presents the entire patient health profile, rather than discrete pieces of an individual’s profile – a distinctive and critically important capability given the growth in U.S. spending on specialty pharmaceuticals.

Catamaran offers retail pharmacy network management, mail service pharmacy, pharmacy claims management and patient-centric specialty pharmacy services to a broad client portfolio, including health plans and employers, as well as healthcare information technology solutions to the industry. In 2015 Catamaran expects to fulfill more than 400 million prescriptions which, combined with OptumRx’s roughly 600 million annual scripts, will enable the combined entity to be a competitive force in the PBM industry. Enhanced purchasing and administrative improvements from the combination are expected to drive substantial value, with the majority of savings expected to directly benefit clients and individuals through reduced costs for prescriptions and enhanced pharmaceutical services.

Both companies have distinctive, rapidly growing specialty pharmacy services businesses. The combined organization will help customers manage the complex costs and outcomes as this portion of the pharmaceutical market expands from an estimated $100 billion in revenues in 2014 to potentially $400 billion annually by 2020.

“With pharmaceutical costs rising rapidly and the increasing prevalence of expensive specialty drugs targeting rare conditions, pharmacy costs are likely to represent an increasing share of healthcare spending in the future,” Dietrich says. “The PBM companies that control access to millions of insureds will play a critical role in determining pricing and insurance premiums.”

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Catamaran Corporation Unveils New Specialty Pharmacy Offering

Catamaran Corp, a leading provider of pharmacy benefit management (PBM) services and technology announced it has launched its new specialty brand, BriovaRx.

Catamaran Corp, a leading provider of pharmacy benefit management (PBM) services and technology announced it has launched its new specialty brand, BriovaRx. BriovaRx marks the beginning of a new day in the specialty sector, delivering personalized, holistic care to patients with complex and chronic conditions to improve health outcomes.

“Patients diagnosed with complex medical conditions often face insurmountable challenges in managing their conditions - financially, emotionally, and physically,” said Mark Thierer, chairman and chief executive officer of Catamaran. “In contrast to an industry that’s focused solely on the drug, BriovaRx focuses on the patient, ensuring they receive one-on-one support and a personalized plan that addresses all conditions — not just the underlying chronic illness – to help them lead healthy, vibrant lives.”

As the fifth largest specialty pharmacy in the nation, BriovaRx has the skill and scale to effectively manage costs for health plans and other payers challenged by escalating specialty drug prices and increased utilization. According to projected trend figures, specialty plan spending is estimated to grow from 18% of total pharmacy costs (2010) to 43% by 2020.

“Since 11 of the 16 most utilized drugs in the nation are classified as specialty, BriovaRx addresses a growing need in our communities to better manage complex conditions like hepatitis C, cancer, crohn’s Disease, HIV, multiple sclerosis, and others,” said Albert Thigpen, senior vice president, Pharmacy Operations, Catamaran. “BriovaRx provides a support system for the patient and coordinates the efforts of providers and payers to streamline delivery and administration of treatment to ensure a more positive experience for every patient and more time for physicians to focus on care.”

Catamaran, under its former name SXC Health Solutions, has more than 15 years of experience within specialty pharmacy. BriovaRx replaces its former specialty pharmacy offering, Medfusion/Ascend.

About Catamaran

Catamaran, the industry’s fastest-growing pharmacy benefits manager, helps organizations and the communities they serve take control of prescription drug costs. Managing more than 200 million prescriptions each year on behalf of 25 million members, our flexible, holistic solutions improve patient care and empower individuals to take charge of their health. Processing 1 in every 5 prescription claims in the United States, Catamaran’s skill and scale deliver compelling financial results and sustainable improvement in the overall health of members. Catamaran is headquartered in Lisle, Illinois, with multiple locations in the United States and Canada. For more information, please visit www.catamaranRx.com .

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609-716-7777