UnitedHealth Bolsters Pharma Presence, Behavioral Health with Genoa Buy

By Leslie Small 

UnitedHealth Group’s acquisition of Genoa Healthcare — the fifth largest pharmacy chain in the country — illustrates how the major managed care players are racing to innovate and stand out, one expert tells AIS Health.

News of a tentative deal was first reported in August, but UnitedHealth did not confirm it until recently.

“To help better support the pharmacy needs of patients with behavioral health and substance use disorders, OptumRx is combining with Genoa Healthcare,” an Optum spokesperson told AIS Health in an emailed statement on Oct. 1. “This will help ensure improved access, health outcomes and pharmacy, telepsychiatry, and medication management experiences for consumers across the country, including Medicare and Medicaid beneficiaries, while helping public and private sector payers reduce their health care costs.”

The spokesperson did not specify a purchase price, but Bloomberg reported it was about $2.5 billion.

Genoa Healthcare operates 435 full-service pharmacies located in community mental health centers that serve patients — mostly covered by Medicaid or Medicare — who “need extra support to stay on complicated medication treatment plans,” according to a fact sheet on its website.

The company meets those needs by conducting proactive medication adherence outreach calls, helping with prior authorizations, and providing special packaging for medications that helps patients understand when to take them. Genoa says peer-reviewed research shows its methods achieve a medication adherence rate of more than 90% and reduce hospitalizations by 40%, among other benefits.

Ashraf Shehata, a principal in KPMG’s health care and life sciences advisory practice, says that not only does the purchase add to UnitedHealth’s ever-growing size — “and bigger is always better” — but it also gives the company an edge in a highly competitive environment where there’s a “race to innovate.”

Indeed, “OptumRx is seen as poised to face greater competitive intensity” in the next two years, especially from Cigna Corp.’s acquisition of Express Scripts Holding Co., Leerink analyst Ana Gupte wrote in a Sept. 20 research note to investors.