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Burchfield Pharmacy Benefit Update - Vol. 2. No. 15
Timely. Relevant. Actionable.

Subject: SXC and Catalyst Announce Merger- 
What Does it Mean to Plan Sponsors?

On Wednesday, April 18, 2012, SXC Health Solutions Corp. (SXC) announced a merger with Catalyst Health Solutions (Catalyst) for approximately $4.4 billion in cash and stock.

SXC projects $125 million in cost savings over the next two years as a result of the merger. SXC has made multiple acquisitions since 2004, the most recent being HealthTrans in January 2012.

The transaction, subject to approval, is expected to close in the second half. The deal would result in a combined company with $13 billion in revenue and the nation’s fourth largest Pharmacy Benefit Manager (PBM).

SXC Chief Executive Mark Thierer will serve as Chairman and CEO of the combined company, with two current Catalyst directors serving on the Board of Directors.

Coming on the heels of the FTC’s approval of the Express Scripts-Medco acquisition, this merger and other factors are changing the dynamics of the PBM industry.  As PBMs evolve to retain and gain market share, the uncertainty leaves the door open for savvy plan sponsors to take advantage of savings opportunities.

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