4. WellCare could be a new Medicare giant
Aetna is selling its entire Medicare prescription drug business, which includes prescriptions for more than 2.2 million people, to WellCare.
- The hope is that it will clear concerns with antitrust enforcers who are looking at the CVS-Aetna deal, Bob reports.
By the numbers: WellCare would have 3.3 million Medicare Part D members if this divestiture occurred, or 13% of the market. WellCare essentially would have the same market share as the combined membership of the soon-to-be-merged Cigna-Express Scripts.
The bottom line: This divestiture wouldn’t materially change the high concentration in Medicare’s standalone drug plan market. Five companies (CVS, UnitedHealth, Humana, WellCare and Cigna-Express Scripts) would control 90% of that market.
1 financing thing: Terms of the deal weren’t disclosed, but the companies said it would be an all-cash transaction. WellCare had $515 million of “unregulated” cash on hand as of June 30.