UnitedHealth to Buy Catamaran for $12.8 Billion in Cash

The Wall Street Journal

March 30, 2015 6:00 a.m. ET

UnitedHealth Group Inc. plans to acquire Catamaran Corp. for about $12.8
billion in cash, bulking up its pharmacy-benefit business as spending on
cutting-edge drugs is a growing concern for employers and insurers.

Catamaran, the fourth-largest pharmacy-benefit manager in the U.S. by volume
of prescriptions processed, will be merged into UnitedHealth Group's OptumRx
unit, the industry's third-largest player and part of the Optum
health-services arm of the health-care giant.

Pharmacy-benefit managers typically work for employers and health plans,
managing the pharmacy benefits and seeking to negotiate favorable prices
with pharmaceutical companies and drugstores. The two companies are betting
that their combined size will generate increased negotiating heft and
economies of scale, as they compete with Express Scripts Holding Co., the
biggest in the industry, and CVS Health Corp., the No. 2.

Insurers and employers are bracing for the prices tied to expected new
treatments for cancer and other conditions such as elevated cholesterol.
Pharmacy-benefit managers are eager to show they have tools to counter those
costs on behalf of clients.

If the OptumRx deal with Catamaran is consummated, each of the big-three PBM
players would offer a different setup. Express Scripts has the largest
volume in the industry. CVS has its own network of pharmacies.