CVS Caremark said it will buy the Medicare Part D business of Rye Brook, NY-based Universal American for $1.25 billion in a deal that will more than double the size of CVS Caremark's Medicare Part D program.
Universal American's Part D business now serves 1.9 million Medicare Prescription Drug Plan members, while CVS Caremark serves 1.2 million Medicare PDP members. The membership does not include 2011 auto assignment or the results of the Annual Enrollment Period which ended Dec. 31.
"Today's transaction furthers CVS Caremark's position as a significant player in one of the nation's fastest growing segments of the Pharmacy Benefit Management industry. A growing portion of the country's population will receive their prescription drug coverage under Medicare plans, driven both by age demographics and the anticipated shift of retirees from employer-based coverage to Medicare that will likely result from health care reform," said Per Lofberg, president of Caremark Pharmacy Services, in a statement.
"The Medicare Part D program is integral to CVS Caremark's long-term growth strategy. We believe that bringing together these two businesses will strengthen our competitive offerings, enabling us to provide Medicare beneficiaries with expanded products and services and lower the cost of pharmacy care," Lofberg said.
When the deal is finalized Woonsocket, RI-based CVS Caremark will be one of the nation's largest providers of prescription drug services for Medicare Part D beneficiaries.