Rite Aid has completed the sale of its Elixir pharmacy benefit management (PBM) company to MedImpact Healthcare Systems for $575 million. The drugstore chain filed for bankruptcy in October 2023 with an agreement to sell the Elixir business to MedImpact Healthcare Systems. In October 2023, Rite Aid filed for Chapter 11 bankruptcy and announced that it had reached an agreement with its creditors. The PBM division Elixir Solutions is part of Rite Aid’s growing pharmacy benefit management company and other assets amid buyout rumblings for the company.
Rite Aid has delayed the auction of its PBM, Elixir Rx Solutions, as part of its Chapter 11 bankruptcy filing. A competitive auction for Rite Aid’s PBM business was canceled on December 21, while the company’s attorney will continue to seek offers for retail stores at auction. Rite Aid received a bankruptcy judge’s approval to sell its Elixir Solutions pharmacy-benefit manager business for $575 million to MedImpact Healthcare Systems.
Drug store chains are struggling due to falling reimbursement rates for prescription drugs, according to analysts who cover the industry. Rite Aid completed the sale of its Elixir pharmacy benefit management company to another PBM, MedImpact Healthcare Systems, Inc. for $575 million. The sale of the PBM would be a key loss, and shares will be delisted. Rite Aid’s new acquisition is not just about adding sales to its top line but also a direct response to competitor CVS, which flipped the pharmacy market. Walgreens does not currently own a PBM, having previously sold its own small one in 2011 for more than $500 million to the company that acquired it.
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Who bought elixir PBM?
Rite Aid has been approved by the U. S. Bankruptcy Court for the District of New Jersey to sell its Elixir Solutions Business to MedImpact Healthcare Systems. The deal is expected to close in Q1 2024, with a closing price of $575 million. Elixir Solutions, a pharmacy benefit management company, provides prescription benefits to Medicare plans and mail order pharmacies. MedImpact Healthcare Systems, a pharmacy benefit solutions company, serves health plans, self-funded employers, and government programs.
What is the Rite Aid scandal?
Rite Aid, founded in 1962 as Thrift D Discount Center, faced an accounting scandal in 1999 when it began restating earnings due to accounting irregularities. Six former Rite Aid senior executives were convicted of conspiracy in 2003 for accounting fraud and false filings with the SEC. The company changed its name to Rite Aid Corporation in 1968 and moved its stock to the New York Stock Exchange in 1970.
Rite Aid’s growth was marked by acquisitions like Envision Pharmaceutical Services in 2015 and two merger deals with Walgreens and Albertsons. Former Rite Aid executives admitted to overstating net income between 1997 and 2000.
Does Walgreens still own Rite Aid?
In 2017, Walgreens announced the cancellation of its merger with Rite Aid, offering to purchase 2, 186 stores for $5. 18 billion, plus a $325 million cancellation penalty. A revised deal was made, with Walgreens purchasing 1, 932 locations for $4. 38 billion, approved by the FTC on September 19. The revised sale was completed in March 2018, leaving Rite Aid with around 2, 600 remaining stores. Three distribution centers and related inventory were transferred, and most stores were rebranded as Walgreens.
In February 2018, Albertsons announced plans to acquire the remainder of Rite Aid in a merger of equals, but the plan failed to please shareholders and was cancelled on August 8, 2018. In October 2020, Rite Aid announced the acquisition of Bartell Drugs, a Seattle-area chain, for $95 million, which faced criticism from customers due to staff turnover and computer system glitches.
What went wrong with Rite Aid?
Rite Aid, the third-largest drugstore chain in the United States, has encountered considerable difficulties as a consequence of prolonged mismanagement and misguided decision-making. The company’s decision to file for bankruptcy in October was precipitated by the accumulation of liabilities associated with lawsuits pertaining to the distribution of opioids and the prevailing challenges within the retail pharmacy sector. In an article published by The Wall Street Journal, the company’s unfortunate history was detailed, with particular emphasis placed on the significant losses incurred over an extended period of time.
What PBM does elixir use?
Elixir Solutions, a subsidiary of Rite Aid, was established in 1999 as MedTrakRx and later merged with EnvisionRx in 2014. It offers pharmacy benefit management, mail order and specialty pharmacies, and prescription benefits to Medicare plans. In October 2023, Rite Aid filed for Chapter 11 bankruptcy, selling its PBM division Elixir Solutions to MedImpact as part of a restructuring plan to reduce debt. Elixir Insurance is not included in the Chapter 11 process. Rite Aid has also secured $3. 45 billion in new financing from its lenders.
Who is the largest PBM in the world?
The Federal Trade Commission (FTC) has reported that the three largest pharmacy benefit managers (PBMs) – CVS Caremark, Cigna’s Express Scripts, and UnitedHealth’s OptumRx – handle 79 of U. S. medical prescriptions for around 270 million people. The report also revealed that PBMs have increased control over medication prices and access, contributing to a 10 closure rate of independent pharmacies in rural locations between 2013 and 2022. These PBMs are vertically integrated, serving as health plans and pharmacists, and playing other roles in the drug supply chain.
The FTC’s interim report reveals how dominant PBMs can increase drug costs, including overcharging patients for cancer drugs. The report also reveals how PBMs can squeeze independent pharmacies, which many Americans, especially those in rural communities, rely on for essential care.
Will Rite Aid sell elixir?
Rite Aid has completed the sale of Elixir, marking a significant milestone in its transformation to strengthen its long-term financial position. The divestiture will better position Rite Aid for long-term success as it evolves its portfolio to focus on core healthcare products, services, and solutions. Rite Aid continues to provide leading healthcare products and services to customers daily, as it progresses in its court-supervised restructuring process and implements its go-forward business plan, Rite Aid 2. 0. The transaction is a great outcome for Rite Aid and its stakeholders.
Why does Rite Aid lose money?
Rite Aid is facing financial difficulties due to factors beyond its control, including record inflation, lower insurer payments, higher labor costs, lower demand for COVID vaccines and retail merchandise, higher theft, and the loss of key corporate clients. The chain has long-term leases for no-profit stores, including $80 million a year for closed stores. Rite Aid is relying on bankruptcy to exit these deals. Rumors of bankruptcy have also surfaced after hiring restructuring advisers in late 2022, and suppliers have demanded cash payments upfront instead of waiting for the company to sell their goods.
Who bought out Rite Aid?
Walgreens Boots Alliance agreed to buy Rite-Aid for $17 billion in 2015 to expand its U. S. presence. Rite Aid’s Chapter 11 filing was unexpected as the company had a large debt burden, $1. 5 billion due in 2025, and a projected fiscal 2024 net loss of almost $700 million. The company also faced substantial opioid-related settlement claims from lawsuits accusing it of contributing to an oversupply of the drug.
Who are the Big 3 PBM?
The concentration of three major pharmacy benefit managers (PBMs) – CVS Caremark, Express Scripts, and Optum Rx – in the US drug supply chain varies significantly among commercial insurance, Medicare Part D, and Medicaid managed care markets. These PBMs dominate their respective markets using various strategies, making federal reform one of the few options to regulate their market power. Despite their significant role in financing and delivering prescription drugs for health insurers, including formulary design, drug pricing negotiation, and pharmacy reimbursement, information on PBM concentration varies across payers is limited.
CVS Caremark’s largest share was in the Medicaid managed care market at 39. 2, Express Scripts’ largest was in the commercial market at 28, and Optum Rx’s largest was in the Medicare Part D market at 27. 7. This data can help inform congressional decisions to regulate anticompetitiveness and market consolidation within the drug supply chain.
What PBM does Rite Aid use?
Rite Aid has sold its Elixir pharmacy benefit management (PBM) company to MedImpact Healthcare Systems for $575 million. The deal, which was completed in February 2024, was a significant move for the drugstore chain, which had previously considered Elixir as its “crown jewel” after purchasing it for over $2 billion in 2015. The deal, which includes mail and specialty pharmacies, prescription discount programs, and 1.
1 million covered PBM plan enrollees, was a key asset to sell after the chain filed for bankruptcy protection in October. Rite Aid CEO Jeffrey S. Stein said the sale was a significant milestone in the company’s transformation to strengthen its long-term financial position.
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People forget about Walmart and Costco. I went to refill my dad’s heart medicine last month at Walgreen’s and since hes recently unemployed and uninsured, they told me it’d be 66 dollars for his 30 day supply! I looked online and saw through the AARP site the prices for his medicine at different stores and when I went to Costco, they gave me 3 months supply of the exact same medication for 9.99. That is 95% off. Tough to justify this system.