No money changes hands, but an
important merger for the healthcare industry was announced Tuesday. It's the
combination of the two biggest electronic prescription networks, RxHub LLC and SureScripts LLC. The former is owned by community pharmacists and the big drugstore chains, including Rite-Aid Corp. and Wal-Mart Stores Inc.; the latter is owned by the pharma benefit managers, including Medco Health Solutions Inc. and CVS Caremark. Both were founded in 2001. In 2008 they expect to transmit a combined 100 million electronic prescriptions.
As we noted in a report last winter, the push to digitize healthcare information is gaining momentum, triggering
dealmaking in various parts of this huge sector.
Given the number of major players involved, it can't have been easy to put this together -- which is pretty much what J.P. Little, acting CEO of RxHub, told Bloomberg. As for governance issues, well, let's just quote the release:
The new organization will remain privately owned and continue to operate under a cost-recovery model as a low-cost health information utility.
Initially, the new organization will be jointly managed by the acting CEO of RxHub, J.P. Little, and the acting CEO of SureScripts, Rick Ratliff. The new board has begun a process to select a CEO and has retained Spencer Stuart to conduct a nationwide search. Driscoll and Roberts will serve as co-chairmen of the board of directors through 2009. [John Driscoll is president, New Markets, Medco Health Solutions, Inc.;
Bruce Roberts is executive vice president and CEO of the National Community Pharmacists Association.]
The co-chairmen will rotate on an annual basis to include one co-chair representing PBMs and the other representing retail pharmacies. The new six-member board includes a single director each from CVS Caremark, Express Scripts, Medco Health Solutions, NACDS and NCPA. The sixth member of the board is designated by NACDS and NCPA. The combined company will have more than 75 employees and will maintain its existing office locations in St. Paul and Alexandria.
Got that? Presumably political skills will be one of the qualifications Spencer Stuart will be seeking in that new CEO. The organization will also be rebranding itself. -
Kenneth Klee
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