Shelby Livingston December
09, 2019
UnitedHealth Group's pharmacy benefit manager
OptumRx announced Monday that it will acquire Diplomat, a struggling specialty
pharmacy and PBM headquartered in Flint, Mich.
Diplomat provides specialty pharmacy and
infusion services nationwide, specializing in managing medications that treat
patients with complex chronic diseases. It entered the PBM business at the end
of 2017 but has had trouble holding on to clients. In August, Diplomat said it
was considering a sale or merger of the company.
OptumRx said the combination would help improve
health outcomes and reduce prescription drug costs. Evercore ISI analyst
Michael Newshel noted in a research report that the deal would help Optum
expand its specialty business while building out a national network of lower
cost infusion centers.
"With its focus in specialty and infusion
services, Diplomat has a proven track record of solving the unique challenges
facing patients with complex health care needs," OptumRx CEO John Prince
said in the announcement. "This combination will expand the innovative
specialty pharmacy and infusion solutions OptumRx can offer to the consumers
and clients we serve, helping ensure people get the right medications and
services at the right time, in the right setting."
OptumRx said it agreed to pay $4 per share for
Diplomat's outstanding common stock and will assume its debt, a purchase price
that amounts to roughly $865 million. Diplomat's share price was $5.81 as of
Friday's close. The company reported a net loss of
$302.3 million on net sales of $5.5 billion in 2018.
UnitedHealth Group, meanwhile, reported that
OptumRx brought in $69.5 billion in revenue in 2018; its earnings from
operations totaled $3.6 billion. OptumRx, is the largest business segment
within Optum, UnitedHealth's fast-growing health services company. Optum has
been growing through multiple acquisitions of physician groups, including DaVita Medical Group.
"Our board of directors carefully
considered a variety of strategic options and concluded that joining OptumRx is
in the best interests of our shareholders, employees and the clients and
patients we serve," Diplomat chairman and CEO Brian Griffin said.
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