Drug Benefit Unit in $4.7 Billion Deal

Express Scripts said Monday that it was acquiring the pharmacy benefit management business of WellPoint in a deal valuing the unit at $4.68 billion.

The amount, to be paid at closing, will include cash and up to $1.4 billion of the common stock, Express Scripts said in a regulatory filing.

Many analysts have said that they expected insurers like WellPoint, Aetna and UnitedHealth to divest themselves of their pharmacy benefit manager units, which manage employee drug programs.

The Obama administration has signaled that it would put additional pressure on private insurance companies as it sought to promote more national insurance. Additionally, these companies are also facing the prospect of lower earnings as more people lose their jobs and their health coverage.

The acquisition of the WellPoint business, which includes its NextRx unit, would give Express Scripts the expanded presence it had previously sought in the pharmacy benefit manager sector.

The transaction includes a 10-year contract for Express Scripts to provide services to WellPoint, the statement said. The deal, which is expected to close in the second half of this year, includes a consideration for the value of a future tax benefit for Express Scripts.