Express Scripts

Express Scripts Holding Company
Public
Traded as
Industry
Founded St. Louis, Missouri (1986)
Headquarters St. Louis, Missouri, U.S.
Key people

Tim Wentworth (President & CEO)
Ron Guerrier (SVP & CIO)

Jim Havel(EVP & CFO)
Products Prescription Benefit Management, Specialty Prescription Management
Revenue Decrease US$ 100.065 billion 2017[1]
Increase US$ 5.494 billion (2017)[1]
Increase US$ 4.532 billion (2017)[1]
Total assets Increase US$ 54.256 billion (2017)[1]
Total equity Increase US$ 18.125 billion (2017)[1]
Number of employees
 26,600 (2017)[1]
Subsidiaries
Website express-scripts.com
Footnotes / references
[2][3]

Express Scripts Holding Company is an American Fortune 100 company. As of 2018, the company is the 25th-largest in the United States as well as the largest pharmacy benefit management (PBM) organization in the United States.[2] Express Scripts had 2016 revenues of $100.752 billion.[2]

The term "scripts" refers to the widely used clipped version of prescription.

Headquartered in St. Louis, Missouri, Express Scripts provides integrated pharmacy benefit management services including network-pharmacy claims processing; home delivery pharmacy services; specialty pharmacy benefit management, through its subsidiary Accredo; benefit-design consultation; drug-utilization review; formulary management; and medical and drug data analysis services to manage drug plans for health plans, self-insured employers and government agencies (both as administrator of employee benefits and public assistance programs). One of its largest clients is the United States Department of Defense's Tricare program.[4]

Express Scripts also offers pharmacy benefit management services for workers' compensation insurance programs. The program is accredited by URAC, the nation's largest accrediting body for pharmacy benefit management companies.

The company processes pharmaceutical claims for members through a network of retail pharmacies. Its own automated pharmacies dispense long-term, chronic medications-like those for diabetes or heart disease-directly to members by home delivery.[5]:4

On March 7, 2018, it was announced that Cigna would buy Express Scripts in a $67 billion deal.[6][7]

On August 24, 2018, the shareholders of Cigna and Express Scripts approved the $67 billion deal.[8][9]

History

Founding

Express Scripts began in 1986 in St. Louis, Missouri as a result of a joint venture between a retail chain of more than 79 pharmacies (Medicare Glaser Inc.) and Sanus Corp. Health Systems.

Sanus traces its history to Bradford Systems and Administrative Services which was founded in Boston in 1968. Bradford had a contract for computer processing of Medicare and Medicaid payments. It was acquired in 1981 by McDonnell-Douglas through its McDonnell Automation Company (McAuto) subsidiary for $11.5 million[10]

In 1983 two of McDonnell Douglas principals Joseph T. Lynaugh (a former director of NYC Health + Hospitals in New York City) and McAuto project manager of the Bradford takeover[11] and Howard L. Waltman a long time Bradford employee [12] formed the Sanus Corporation with substantial investments and ownership from McDonnell Douglas including a McDonnell Douglas whole ownership of the St. Louis office. General American Life Insurance Company invested in the larger parent based in New York. Sansa was a health maintenance organization and it merged with the General America Life Insurance preferred provider organization.[13] Sanus rapidly grew and by 1986 it had 200,000 clients and $100 million in revenue operated in the St. Louis, Dallas, Fort Worth, Houston, and Washington, D.C. markets

It created a subsidiary called GenCare to fill prescriptions. In late 1986 it announced a deal with St. Louis based pharmacy Medicare-Glaser for fulfilling prescriptions that would be 50-50 split ownership between Sanus and Medicare-Glaser called Express Scripts (scripts being medical industry jargon for prescriptions). Initial plans called for Missouri and Illinois clients to get their prescriptions at the Medicare-Glaser brick and mortar pharmacies while those in other cities could get their prescriptions via mail order -- a innovation at the time.[14] The initial report of the creation said that Charles H. Ridings, formerly in charge of McDonnell Douglas mergers and acquisitions, was named the first chief executive (although he was quickly replaced by Waltman).[15]

Sanus remained the dominant early insurance customer but Express Scripts began marketing to other providers. With increased investment by New York Life Sansus change its name to NYL Cares and in 1998 was sold to Aetna for $1.05 billion.[16]

The Glaser Drug Company sold to chain SupeRx in 1989 for $18.2 million (selling Express Scripts partnership interest back to Sanus before the acquisition). SupeRX declared bankruptcy and all stores closed in 1991 after Walgreens acquired the pharmacy records. SupeRX's loan to buy the chain had been financed the Lincoln Savings and Loan Association Morris Glaser had founded the company on October 1, 1924. In 1959 Glaser opened discount pharmacies which would be called Medicare Pharamcy. The discount pharmacies were design to be resemble a doctor waiting room and were only about 800 to 1,000 square feet which focused just on the prescriptions. The two companies although sharing the same name operated separately. peaking at 100 stores.[17]

General America, which had been a private St. Louis-based insurance since 1933, was acquired by MetLife for $1.2 billion in 1999. General America had run into financial problems and had said it could not pay back $6.8 billion in short term bonds to investors.[18][19]

1989-1999

Express Scripts was purchased by New York Life Insurance Company in 1989 and became a publicly traded company in 1992. In 1993, Express Scripts signed on both FHP International and Maxicare Health Care and corporate clients Lockheed, Service Merchandise, and Ingersoll-Rand.[20] In 1994, the company expanded its services by adding workers’ compensation prescription services and reinsurance.[20] In 1994, the company announced a two-for-one stock split, and in 1996 established Express Scripts Canada. The same year, the company began the annual Drug Trend Report and launched the Outcomes Symposium Conference.[21]

In April 1998, Express Scripts acquired ValueRx, the PBM business of Columbia/HCA Healthcare Corp.[20] The following year, in April 1999, the company purchased Diversified Pharmaceutical Services from SmithKline Beecham Corp for $700 million.[20] That same year, the company purchased stock in PlanetRx.com.[20] This partnership offered members options for purchasing prescriptions and over-the-counter health products online.[20]

2000-2010

In 2000, the company had to write off its $165 million relationship with PlanetRx.com when the startup experienced financial difficulties.[20] In 2001, Express Scripts partnered with Merck-Medco and Advance PSC to form RxHub LLC.[20]

In late December 2006, Express Scripts made a proposal to purchase Caremark. Express Scripts lost the race to acquire Caremark to CVS Corporation, which became CVS/Caremark Corporation on March 22, 2007.[22]

In October 2007, Express Scripts acquired ConnectYourCare, and now handles FSA, HRA and HSA accounts for companies such as Suntrust, Zions Bancorporation and Allegis.[23] However, Express Scripts divested ConnectYourCare in August 2012.[23][24]

On April 13, 2009, it was announced that Indianapolis-based WellPoint had reached a definitive agreement under which Saint Louis based Express Scripts purchased WellPoint's NextRx subsidiaries for $4.675 billion.[25] Express Scripts, the United States third largest PBM, closed the transaction in December 2009.[26]

2010-present

In April 2012, Express Scripts completed a $29.1 billion acquisition of Medco Health Solutions.[27] The Federal Trade Commission gave formal approval on April 2, 2012 after an anti-trust investigation.[27] The acquisition positioned Express Scripts Holding Co. as the largest pharmacy benefit manager, filling 1.4 billion annual prescriptions.[27]

In 2017, Express Scripts launched Inside Rx, a partially owned subsidiary that provides discounts on medications for the uninsured and underinsured.[28] In July 2017, Express Scripts purchased myMatrixx, a workers' compensation pharmacy benefits company based in Tampa, for $250 million.[29]

In October 2017, Express Scripts lost its biggest client Anthem which said it would not renew the PBM contact in 2019 and would instead use CVS Health. Anthem in court filings Express had overcharged it by $3 billion. Anthem said that it would launch its own competing PBM service IngenioRx. The battle between the two companies in 2017 caused Express Scripts stock to drop by nearly a third.[30] Express Scripts announced its acquisition of eviCore in October 2017. The $3.6 billion deal closed that December.[31][32][33] In November 2017, Express Scripts announced it was divesting United BioSource Corp. (UBC), its pharmaceutical support business. UBC was sold to Avista Capital Partners.[34][35][36]

In March 2018, Cigna which earlier was blocked by courts from acquiring Anthem announced a $67 billion deal to acquire Express Scripts. The Express Scripts acquisition would be the last the major deals involving the country's largest PBM's. In 2017, CVS Health announced a merger with Aetna (which has still not completed). The takeover of PBM have drawn regulator resistance because of fears it creates anti-competitive environment. Insurance companies have charged the PBM model has contributed to high drug prices because the PBM's take a commission on the transactions.[37][38]

Express Scripts has 30,000 employees worldwide.[39][26][39]

World headquarters

Express Scripts headquarters in April 2013

In 2007, the company became the first and only Fortune 500 company to open a headquarters on a college campus when it opened its headquarters at 1 Express Way on the north edge of the University of Missouri–St. Louis north of University Place Drive and south of Interstate 70 in Missouri A second headquarters building adjoining the original one opened in 2008. Three additional structures have been added to the NorthPark development on the north side of I-70 including an Office and Data Center, Tech and Innovation Center, and Operations Center. The area north of I-70 is separate from the university.[40] In 2018 the majority of the 5,000 St. Louis Express Scripts employees work in the complex.[40]

George Paz, CEO of Express Scripts at the time of the move, was an UMSL graduate.[41] Express Scripts which leases rather than owns both its headquarters and nearby office park received substantial tax breaks.[42] Since the move the company has been an active partner with the university including contributing money to renovate the computer sciences building (Express Scripts Hall),[43] raising funds for building projects, sponsoring a pre-collegiate bridge program for high school students and sponsoring a small business incubator.

Express Scripts throughout its entire history has been in St. Louis County, Missouri rather than the city of St. Louis. It was originally headquartered in Maryland Heights, Missouri and its current headquarters is about 4 miles west of the St. Louis city limits and its two building headquarters campus is actually spread across three jurisdictions. The entrance to the main building is located in Cool Valley, Missouri.[44] The southeast portion of the campus is in Bellerive, Missouri[45] and the southwest corner of the two-building complex is in unincorporated St. Louis County.[46] The three buildings north of I-70 are in Berkeley, Missouri[47]

Chief executives

Drug Trend Report

Published annually since 1993, the Express Scripts Drug Trend Report provides detailed analysis of prescription drug costs and utilization.[20][49] Now a web-based version, the Drug Trend Report is developed and published by the Express Scripts Research & New Solutions Lab with contributors from researchers, clinicians and others.[50] This type of research is designed to understand consumer behavior relative to healthcare benefits.[51][52]

Health decision science

Health science is the study of how people make decisions, and how to help them make better ones. Upon the merger of Express Scripts and Medco Health Solutions, the company came up with its own approach to understand its members health concerns, which it has dubbed Health Decision Science. This involves looking at three scientific disciplines: behavioral science or “consumerology”, clinical specialization, and actionable data.[53][54][55] Because of its position between pharmacies and health care plans, Express Scripts sees 1.4 billion prescriptions a year, and it uses this information as part of its research data to create better solutions for clients and patients.[56][57][58][59][60]

Controversy

Fraud allegations

On August 4, 2004, New York State Attorney General Eliot Spitzer filed a lawsuit against Express Scripts alleging that the company had kept tens of millions of dollars in drug rebates owed to the state. The suit was filed in the New York Supreme Court in Albany County.[61] The lawsuit further claimed that Express Scripts had overstated the cost benefits of switching to certain preferred medications. In 2008 the company settled the lawsuit, agreeing to pay $9.3 million to Pennsylvania and 28 other states to resolve claims of deceptive business practices. As part of the settlement, the company also agreed to change its business practices and pay up to $200,000 in reimbursement to patients.[62]

Information breach

In October 2008, the St. Louis headquarters received an anonymous letter that contained sensitive information about 75 members.[63] The extortionist stated that they would release more of similar records if the company failed to pay an unspecified amount of money. A consumer class action lawsuit against Express Scripts was brought on by John Amburgy, a Missouri man, who accused the company of negligence in protecting customer records. The case was dismissed when Amburgy failed to show how he was directly affected by the breach.[64]

References

  1. 1 2 3 4 5 6 "Express Scripts 2017 Annual Report (Form 10-K)" (PDF). Retrieved 31 March 2018.
  2. 1 2 3 "Express Scripts Holding". Fortune. 2017. Key Financials (Last Fiscal Year).
  3. ↑ "Express Scripts Holding Company Profiles". Yahoo! Finance. Retrieved May 20, 2017.
  4. ↑ "We Are Express Scripts : We Never Stand Still (2010 Annual Report)" (PDF download). NASDAQ. 9 March 2011. Retrieved 11 August 2015.
  5. ↑ "EXPRESS SCRIPTS HOLDING COMPANY FORM 10-K". EDGAR. 18 February 2013. Retrieved 20 November 2013.
  6. ↑ "Health insurer Cigna to buy Express Scripts in $67 billion deal". CNBC. March 7, 2018. Retrieved March 8, 2018.
  7. ↑ Minemyer, Paige (March 8, 2018). "Cigna to buy Express Scripts in $67B deal". FierceHealthcare. Retrieved March 8, 2018.
  8. ↑ "Cigna Shareholders Approve $67 Billion Express Scripts Acquisition". Newsmax Finance. August 24, 2018. Retrieved August 31, 2018.
  9. ↑ "Cigna, Express Scripts Shareholders Approve $67 Billion Deal". Hamodia. August 26, 2018. Retrieved August 31, 2018.
  10. ↑ Bradford National Sells a Division - The New York Times
  11. ↑ https://www.newspapers.com/image/121504036/
  12. ↑ Howard L. Waltman
  13. ↑ https://www.newspapers.com/image/140996821/?terms=sanus%2Blynaugh
  14. ↑ Express Scripts Incorporated - Company Profile, Information, Business Description, History, Background Information on Express Scripts Incorporated
  15. ↑ 11 Nov 1986, Page 14 - St. Louis Post-Dispatch at Newspapers.com
  16. ↑ 11 Dec 1998, Page 69 - The Tennessean at Newspapers.com
  17. ↑ 14 Jan 1991, Page 69 - St. Louis Post-Dispatch at Newspapers.com
  18. ↑ http://money.cnn.com/1999/08/26/companies/metlife/
  19. ↑ https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=4233378
  20. 1 2 3 4 5 6 7 8 9 "Express Scripts Inc". International Directory of Company Histories. Retrieved 20 November 2013 – via encyclopedia.com.
  21. ↑ "Corporate Milestones". Investor Relations. Express Scripts. Archived from the original on 2016-02-09. Retrieved 29 September 2012 – via NASDAQ.
  22. ↑ Pritchard, Carolyn (18 December 2006). "Express Scripts makes $26 billion bid for Caremark". MarketWatch. Retrieved 20 November 2013.
  23. 1 2 "Express Scripts divesting ConnectYourCare unit". Retrieved 2013-11-20.
  24. ↑ "EXPRESS SCRIPTS HOLDING COMPANY FORM 8-K". Retrieved 2013-11-20.
  25. ↑ "Express Scripts 2009 10-K". Retrieved 2011-02-19.
  26. 1 2 "Express Scripts plans to add 1,500 jobs in north St. Louis County". St. Louis Post-Dispatch. June 20, 2013.
  27. 1 2 3 "Express Scripts First-Quarter Net Rose 39%, Helped by Acquisition". The Wall Street Journal. Retrieved 2013-11-20.
  28. ↑ Thomas, Katie (May 8, 2017). "Express Scripts to Offer Cheaper Drugs for Uninsured Customers". The New York Times. Retrieved May 20, 2017.
  29. ↑ Express Scripts discloses purchase price for myMatrixx
  30. ↑ Anthem Breaks With Express Scripts, Will Start Own Drug Plan - Bloomberg
  31. ↑ Express Scripts To Buy eviCore For $3.6B As Value-Based Care Takes Hold
  32. ↑ Express Scripts buys medical benefits management firm eviCore for $3.6 billion
  33. ↑ Express Scripts Buys eviCore for $3.6B, Forays Into MBM
  34. ↑ Express Scripts To Sell Drug Support Unit As PBM Industry Shifts Focus
  35. ↑ Express Scripts unloads the rest of United BioSource
  36. ↑ Express Scripts to sell subsidiary to private-equity firm
  37. ↑ Thomas, Katie; Abelson, Reed; Bray, Chad (March 8, 2018). "Cigna to Buy Express Scripts in $52 Billion Health Care Deal". The New York Times. Retrieved March 15, 2018.
  38. ↑ Prusty, Sonali (November 1, 2017). "Merger speculation, vertical integration of pharmacy lives shakeup PBM". DRG. Retrieved March 15, 2018.
  39. 1 2 "Express Scripts plans to add 1,500 jobs in north St. Louis County". Retrieved 2013-11-20.
  40. 1 2 https://www.bizjournals.com/stlouis/news/2018/03/08/st-louis-job-cuts-seen-in-cigna-express-scripts.html
  41. ↑ Express Scripts Chairman George Paz takes leadership of the Chancellor’s Council at UMSL | UMSL Daily
  42. ↑ https://www.umsl.edu/library/university-archives/Student%20Newspaper/Current,%202005-2007/2005/September%2012,%202005.pdf
  43. ↑ UMSL renames computer building Express Scripts Hall | UMSL Daily
  44. ↑ Google Maps
  45. ↑ Google Maps
  46. ↑ https://www.stlouisco.com/Portals/8/docs/Document%20Library/Public%20Works/code%20enforcement/Maps/Munis-color.pdf
  47. ↑ Google Maps
  48. ↑ Express Scripts
  49. ↑ "Generics brought down common drug prices in 2012: Express Scripts". Reuters. 2013-03-05. Retrieved 2013-11-20.
  50. ↑ "Spending on Basic Prescriptions Decreases". The Wall Street Journal. Retrieved 2013-11-20.
  51. ↑ Thomas, Katie (2013-03-18). "U.S. Drug Costs Dropped in 2012, but Rises Loom". The New York Times. Retrieved 2013-11-20.
  52. ↑ "Drug Trend Report". Retrieved 2013-11-20.
  53. ↑ "Alabama among most wasteful states in medical spending". Retrieved 2013-11-20.
  54. ↑ "Numbers, Numbers and More Numbers". The Wall Street Journal. Retrieved 2013-11-20.
  55. ↑ "Health Decision Science". Retrieved 2013-11-20.
  56. ↑ "How Big Data Can Catch Oxycontin Abusers and Bad Docs". Retrieved 2013-11-20.
  57. ↑ "Collaboration may improve medication adherence". Retrieved 2013-11-20.
  58. ↑ "Not taking your medication, or taking waaay too much? The data knows …". Retrieved 2013-11-20.
  59. ↑ "Patient engagement's obstacle: human nature". Retrieved 2013-11-20.
  60. ↑ Herper, Matthew. "Does Medication Waste Cost The U.S. $418 Billion?". Forbes. Retrieved 2013-11-20.
  61. ↑ Raksha Shetty (2004-08-04). "Drug Benefit Company Accused of Fraud". Cbsnews.com. Retrieved 2011-02-19.
  62. ↑ "Pennsylvania Attorney General Corbett Announces Multi-State Settlement With Express Sc... (HARRISBURG Pa. May 27 - One of ...)". Bio-medicine.org. 2008-05-27. Retrieved 2011-02-19.
  63. ↑ Vamosi, R. (2008, November 6). "Extortion used in express scripts database breach".
  64. ↑ Vijayan, J. (2009, December 3). "No harm, no foul, says judge in express script data breach case"
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.