One of the United States' largest pharmacy benefit managers is looking to expand its services overseas with an acquisition in Germany.
Medco Health Solutions, Inc., a Franklin Lakes, N.J.-based company with total net revenues of more than $44 billion in 2007, announced Tuesday the acquisition of a majority interest in Europa Apotheek Venlo, a Dusseldorf-based provider of clinical healthcare and mail-order pharmacy services.
"With shared values focusing on improving clinical care and patient safety, Europe Apotheek and its management team will extend its leadership in helping to ensure that quality pharmacy care is increasingly affordable in one of the world's fastest-growing healthcare economies," said John Driscoll, Medco's' president for new markets.
Germany is reportedly Europe's fastest growing market for pharmacy healthcare services, with a growth rate of 5 percent per year and annual spending reported at $35 billion. Mail-order pharmacy services are expected to reach $3 billion by 2012,
Founded in 2001, Europa Apotheek serves Dutch and German healthcare markets from a Netherlands-based center, providing a centralized, dispensing-by-mail service through drop-off locations in Drogerie Markt stores, Germany's second largest drug store chain. The company specializes in treating patients with chronic diseases, such as diabetes, heart disease, arthritis, multiple sclerosis and HIV.
Medco officials say the Europa Apotheek distribution model is consistent with Medco's central fill-in service.
"This is a logical extension of our international strategy - leveraging our proven proprietary technologies and, with best-of-breed partners, delivering solutions to the challenges of managing healthcare costs and improving clinical care abroad," Driscoll said.
Medco's prescription drug benefit programs cover an estimated one in five Americans, company officials said, serving those with chronic and complex conditions through Medco Therapeutic Resource Centers, the Liberty Medical diabetes pharmacy care practice and the Accredo Health Group, Inc. specialty pharmacy operation.
Under the transaction, which is subject to regulatory review in Germany, Medco paid approximately $120 million to secure a majority equity interest in Europa Apotheek, with additional future consideration for achieving performance targets.
"German healthcare providers must achieve financial stability, and our innovative approach to pharmacy care is increasingly providing a more affordable solutions," said Klaus Gritschneder, a Europa Apotheek board member. "Our desire to deliver unmatched clinical excellence, dispensing accuracy and cost reduction is perfectly aligned with Medco's strengths."