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CVS Caremark to buy Medicare Part D business
January 3rd, 2011
WOONSOCKET, R.I. – CVS Caremark Corp. has agreed to acquire the Medicare Part D business of Universal American for $1.25 billion.
The company said Friday that the acquisition of the Part D business of Rye Brook, N.Y.-based Universal American, a leading Medicare prescription drug plan (PDP) sponsor, will more than double the size of its Medicare Part D program.
Universal American's Part D business serves about 1.9 million Medicare PDP members, while CVS Caremark serves approximately 1.2 million Medicare PDP members.
"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," Per Lofberg, president of Caremark Pharmacy Services, said in a statement.
"The Medicare Part D program is integral to CVS Caremark's long-term growth strategy," Lofberg added. "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."
CVS Caremark said that upon completion of the transaction, it will become one of the nation's largest providers of prescription drug services for Medicare Part D beneficiaries. The deal is expected to close by the end of the second quarter, pending regulatory approvals and other conditions.