UPDATE: Jan. 4, 2021: Centene has completed its acquisition of Pantherx, the payer announced Wednesday. The specialty pharmacy will operate independently as part of the insurer's drug management program, as expected.
- Centene on Tuesday signed a definitive agreement to acquire Pantherx, a specialty pharmacy focused on orphan drugs and rare diseases, solidifying its foothold in the booming specialty drug market.
- Pantherx will operate independently as part of the payer's drug management program, called Evolve Pharmacy Solutions, which includes pharmacy benefit management and specialty pharmacy capabilities.
- The transaction is expected to close before the end of the year. Financial terms of the deal were not disclosed. Centene stock was up slightly in premarket trading Tuesday on the news.
Regulators have enacted a slew of marketing incentives to try to push drug companies to invest in therapies for rare diseases. Though such policies have stirred criticism that pharmaceutical manufacturers could be gaming the system to boost their bottom lines, they've resulted in a surge of approvals from the Food and Drug Administration for orphan drugs.
Specialty pharmacies like Pantherx connect patients who have serious, rare conditions such as cancer, hemophilia or HIV/AIDS to complex therapies that in many cases require special handling and ongoing patient management. For that reason, specialty pharmacies offer services beyond their retail peers, including adherence management, help with prior authorization, financial assistance and patient monitoring.
With the buy, Centene is looking to boost its capabilities for its members with rare and complex diseases, according to its CEO, Michael Neidorff.
It will also help the payer solidify its foothold in a booming market, as specialty medications are a major driver of increased drug spending. Orphan drug sales are forecast to increase to $217 billion in 2024, up from $119 billion in 2018, according to pharma research firm Evaluate.
Pittsburgh-based Pantherx was founded in 2011 and has grown quickly. In 2018, the company had revenue of $726 million, representing a three-year growth rate of almost 1,635%.
Pantherx currently distributes 17 therapies for rare disorders such as gastrointestinal stromal tumors, infantile spasms, narcolepsy and tardive dyskinesia, according to its website.
The news comes less than a week after Centene closed another acquisition, of analytics firm Apixio, also for an undisclosed amount. Apixio takes in patient data and uses AI and other functions to analyze it, helping healthcare organizations use it for back-end functions and more targeted patient care. Like Pantherx, Apixio is remaining an independent entity inside a Centene business, and will still sell to third-party customers.
Like other major payers, Centene has reported sweeping profits this year due to patients deferring non-essential care during the pandemic. In the third quarter alone, the St. Louis-based insurer reported profit of $568 million, about six times higher than the same time last year.