Caremark Rx to Purchase AdvancePCS

Caremark Rx is buying AdvancePCS for about $6 billion in stock, cash, and debt. The merged company will have a market value of about $13 billion and combined annual revenues of $23 billion, making the new company the second largest in terms of revenue behind Medco, which had 2002 sales of $33 billion. Medco was spun off from Merck & Co as an independent company in August.

"Caremark Rx and AdvancePCS are a compelling strategic fit with relatively little market overlap," said Mac Crawford, chairman and chief executive officer of Caremark Rx. "AdvancePCS has built a strong base of managed care customers while Caremark Rx has focused on the employer marketplace."

Management of both companies said they believe that the transaction offers the opportunity to significantly enhance the depth and breadth of the specialty pharmaceutical and disease management services provided. The transaction will combine specialty disease management services related to primary pulmonary hypertension and Gaucher disease provided by AdvancePCS with Caremark Rx's focus on chronic conditions such as hemophilia, multiple sclerosis, hepatitis C, and rheumatoid arthritis. The combination is also expected to enhance the provision of mail-order services.

Drug Benefit Trends 15(9):18-22, 2003.
© 2003 Cliggott Publishing, Division of SCP Communications

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