Rite Aid gets court approval for $575M Elixir sale
Rite Aid secured court approval to sell its pharmacy benefit manager unit Elixir to PBM MedImpact Healthcare Systems for $575 million.
Details: Troubled pharmacy chain Rite Aid shopped Elixir to more than 30 prospective buyers during its bankruptcy, but none topped MedImpact's initial price offer, Rite Aid attorney Ross Fiedler said at a bankruptcy court hearing in Trenton, New Jersey.
- Three years later, analysts were urging a sale of the pharmacy unit to reduce some of Rite Aid's debt.
- In 2022, Rite Aid was hit with a class-action lawsuit alleging the company made "false and/or misleading statements" to investors about Elixir's status.
- Rite Aid paid a $252.2 million goodwill impairment charge related to Elixir in September 2022.
Where it stands: "We are continuing to make progress with our court-supervised process and are moving forward with our Rite Aid 2.0 Plan," CEO Jeffery Stein said in a statement.
Catch up fast: Since filing for Chapter 11 bankruptcy last October, Rite Aid has closed about 200 stores, with plans to potentially shutter more.
Be smart: PBMs have become something of a four-letter word in health care with just three companies commanding 80% of the drug market and controlling drug prices while acting as brokers between insurers and consumers.
- The so-called Big Three are CVS Health (Caremark), Cigna (Express Scripts), and UnitedHealth (OptumRx).
Meanwhile, dozens of PBM-related bills are moving through Congress in an attempt to remedy some misaligned incentives and make modest improvements.
- For example, a "delinking" provision in the Senate Finance bill would shift PBM pay from being based on drug prices to a flat service fee, axing an incentive that favors PBMs' preferences for pricey drugs.
- The FTC has also been probing the operations of PBMs including MedImpact, Humana Pharmacy Solutions, Prime Therapeutics, Zinc Health Services, and Ascent Health Services in the hopes of determining whether PBMs have an unfair competitive advantage.