The St. Louis-based insurer Centene said it's buying a comprehensive speciality drug company called AcariaHealth for $152 million, as part of its plan for treatment of complex illnesses.
Jason Harrold, Centene's executive VP for specialty companies, said the acquisition should set up AcariaHealth to provide the insurer's pharmacy benefit subsidiary, US Script, with pharmaceutical products for complex diseases like hepatitis C, hemophilia, multiple sclerosis, rheumatoid arthritis and some cancers.
Centene is primarily focused on government healthcare programs like CHIP and Medicaid, with managed care plans in 14 states and some 1.9 million members as of last fall. Harrold, who joined Centene in 2009 after leading the North Carolina-based vision benefits firm OptiCare, said AcariaHealth serving as a sister company "will enhance US Script's ability to serve as a stand-alone pharmacy benefit management company, which is a key component to Centene's broader product offerings to its state customers."
"This integrated approach, particularly with high cost specialty drugs, will allow us to better serve the needs of our members, including the high-acuity populations such as the Aged, Blind or Disabled and Dual Eligibles," Harrold said.
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AcariaHealth is based in Orlando, Fla., with pharmacies in four states, and is being sold to Centene as Specialty Therapeutic Care Holdings by the New York-based private equity firm Enhanced Equity Funds.
Centene has expanded its Medicaid managed care plans over the past few years, beginning a new contract with Washington State last July. Recently, though, some unexpected costs -- including a legal dispute over a terminated contract with Kentucky -- led the company to reduce its 2012 profit estimates.
In December, Centene said it was seeing higher than expected medical costs thanks to an intensive flu season in several large markets, premium reserve increases in Kentucky and, in Texas, an influx of higher acuity members added from another health plan and higher than anticipated utilization rates in the Hidalgo Star and Medicaid Rural Service Areas programs.