Express Scripts' purchase of EviCore seen as response to Amazon
US medical company Express Scripts is set to acquire EviCore Healthcare in a deal worth $3.6bn. South Carolina-based EviCore Health pre-approves costly tests and scans for health plans. Industry insiders have speculated the deal is a signal Express Scripts is bracing itself for Amazon to enter the healthcare marketplace by expanding beyond the pharmacy benefit manager market into medical benefit management. Express Scripts CEO Tim Wentworth did not comment on Amazon's suspected interest in the sector but said the acquisition would "deliver value for our clients, patients, providers, and shareholders".

Express Scripts plans to shell out $3.6 billion to buy eviCore Healthcare from a group of investors. It’s a deal that will see the company break free from the prescription drug benefits manager and expand into the wider realm of medical benefit management for insurers, media reports noted.

EviCore Healthcare pre-approves scans and other pricey tests for health plans covering 100 million people, according to Bloomberg. Of course, there is the flipside of saving health plans money, as Saurabh Jha, a radiologist with the Hospital at the University of Pennsylvania, noted on Twitter:

Imagine if you can make money for denying care with zero liability. No, this is not Disney. This is healthcare https://t.co/YgkTI91EMn — Saurabh Jha (@RogueRad) October 10, 2017

Pharmacy benefit managers, among other things, negotiate prices of covered drugs with pharma companies, use financial incentives to steer patients to lower-cost generics and manage high-cost specialty medications.

The deal could be a way for Express Scripts to protect itself against the intimidating competition Amazon could offer if it would move into the PBM sector, as CNBC reported earlier this year. But in a statement from Express Scripts CEO Tim Wentworth, it wasn’t clear that the move by the PBM was a reaction to Amazon, although he did suggest the deal would consolidate its power in the patient benefit management market.

“By further strengthening our independent model and creating numerous opportunities for growth, the acquisition of eviCore will deliver value for our clients, patients, providers, and shareholders,” he said in the statement.

In support of its medical benefits management business, eviCore acquired QPID Health last year. The business, which functions as a subsidiary of eviCore, produced a clinical decision support tool that works on top of providers’ electronic medical record systems. Its Q-Guide is designed to be used before high-cost, high-volume medical procedures to give physicians a better way to assess the need for a procedure with the patient’s risk factors.

The acquisition is expected to close by the end of year.

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