CVS Caremark to buy Universal American's Medicare drug business for $1.25 bn
03 Jan 2011
CVS Caremark, the second-largest drugstore chain in the US, has agreed to buy Universal American's Medicare Part D prescription drug business for about $1.25 billion.
With net income of $3.7 billion in 2009 on revenues of $99 billion, Rhode Island-based CVS the largest provider of prescription drugs in the US said that the acquisition will more than double the size of its Medicare Part D program.
Universal American's Part D business currently serves approximately 1.9 million Medicare pharmacy-benefit management members (PBM), while CVS has about 1.2 million.
The acquisition will put CVS in a better position to cope with competitors in the Medicare business such as UnitedHealth Group and Humana Inc.
Under the deal that is expected to close by the end of the second quarter, Universal shareholders would receive about $12.80 to $13 a share in cash after the payment of other transaction-related expenses.
Prescription drug coverage funded by Medicare is projected to be one of the fastest growing segments of the PBM market, given the aging demographics and the growing trend of retiree coverage being increasingly shifted to Medicare funding.
.webp)
