Prime Therapeutics has officially acquired Magellan Rx Management, a popular pharmacy benefit manager (PBM) in the specialty pharmacy space. The acquisition was announced in May 2022 and includes the acquisition of Magellan Rx’s specialty, PBM, and government pharmaceutical and Medicaid business segments.
Pharmacy benefit manager (PBM) Prime Therapeutics announced that it has closed its deal acquiring Magellan Rx Management, another PBM in the specialty pharmacy space. The deal, which was originally announced in May 2022, is intended to create a “diversified pharmacy solutions organization serving commercial markets and government programs.”
PBMs play a large hand in biosimilar accessibility, as they are the parties that have the greatest say in which biosimilars get added to formulary tier lists. They also heavily influence decisions regarding prior authorization requirements and step therapy policies, which can either help or hinder biosimilar adoption.
A report from 2021 from Magellan Rx found that step therapy measures that promote biosimilar utilization or parity reimbursement helped Magellan Rx achieve a 90% utilization rate of oncology biosimilars over a 1-year period, signaling that PBMs that prioritize these plans can boost adoption rates and cut costs significantly.
The agreement enabled Prime Therapeutics to acquire several Magellan Rx business segments, including:
“This is a rare opportunity to bring together two highly respected organizations to create an enterprise that is greater than the sum of its parts. Together, we will deliver on the health care Quadruple Aim – affordability, patient service, improved health and engagement with caregivers,” commented Ken Paulus, president and CEO of Prime Therapeutics, in a statement.
According to Prime, Magellan Rx will operate independently for the time being as it focuses on its current customer commitments. In the coming months, Prime Therapeutics will work to integrate some of Magellan’s business units and functions and assess how it can strategize further integration. Both brands will remain the market for up to 1 year as they prepare for integrating and exploring brand opportunities.
“We’re bringing some of the brightest minds and most dedicated teams in pharmacy together to develop and deliver a next-generation care model that will transform the industry, unlock new possibilities and deliver even more value to those we serve,” said Mostafa Kamal, CEO of Magellan Rx.
Prime Therapeutics serves health plans, employers, and government programs and is collectively owned by 19 Blue Cross and Blue Shield Plans, its subsidiaries, or its affiliates.
PBMs and Payers Lying in Wait for Adalimumab Biosimilars
The acquisition can also create more uniformity among payers that work with the 2 brands, creating less confusion about which biosimilars will be covered and how that coverage will compare to reference products.
With the US market introduction of adalimumab biosimilars on the horizon (beginning in 2023), many stakeholders have raised concerns about whether insurance plans will cover biosimilars, how many will they cover, which ones they will cover, whether they will be placed on a higher preference tier than the originator (Humira), and if they will differ from each other.