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UnitedHealth to Spread in Pharmacy Business With Genoa Deal
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Last week, UnitedHealth Group Inc. (UNH - Free Report) reached a tentative agreement to buy specialty pharmacy Genoa Health.
This deal marks another insurer spreading its footprint in the pharmacy business. Insurers such as Aetna Inc. and Cigna Corp. (CI - Free Report) are already on the path to make it big in the pharmacy market. Aetna will be taken over by CVS Health Corporation (CVS - Free Report) and Cigna is in the middle of the course to buy Express Scripts. Both CVS and Express Scripts are leaders in the pharmacy space and these deals will provide insurers Aetna and Cigna an instant and big presence in the pharmacy market.
Such deals between an insurer and a pharmacy company qualify as vertical collaborations and are increasingly being witnessed in the health care space as players equip themselves to face competition from the entry of Amazon.
Notably, Amazon marked its foray into the pharmacy business via the purchase of an online pharmacy delivery company PillPack for $1 billion, last month.
The purchase of Genoa Health, having 400 pharmacies located within community mental health centers, will further strengthen UnitedHealth’s pharmacy benefit management and Specialty Rx business.
The mental health market is slated to grow given the increased incidence of mental disorders, government initiatives for increasing awareness about mental disorders, and the improving accessibility of behavioral health care.
UnitedHealth has actively made a number of acquisitions that as ramped up its growth profile. Acquisitions especially in its Optum segment, its health service business have led to immense growth of this business segment, which provides significant diversification benefits to UnitedHealth. The latest buyout of Genoa Health will also be made in the company’s Optum segment.
From 2014 to 2017, the segment compounded revenues at 24% per year and operating earnings at 26% a year. Revenues and operating earnings further grew 10% and 25%, respectively, in the first half of 2018. A number of acquisitions made in this segment, use of advanced technology, market leading health analytics, modern care delivery and data-driven population health approaches lend Optum a long runway for growth. Each subsegment is expected to deliver a solid performance, driving the over segment’s growth in turn.
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Image: Bigstock
UnitedHealth to Spread in Pharmacy Business With Genoa Deal
Last week, UnitedHealth Group Inc. (UNH - Free Report) reached a tentative agreement to buy specialty pharmacy Genoa Health.
This deal marks another insurer spreading its footprint in the pharmacy business. Insurers such as Aetna Inc. and Cigna Corp. (CI - Free Report) are already on the path to make it big in the pharmacy market. Aetna will be taken over by CVS Health Corporation (CVS - Free Report) and Cigna is in the middle of the course to buy Express Scripts. Both CVS and Express Scripts are leaders in the pharmacy space and these deals will provide insurers Aetna and Cigna an instant and big presence in the pharmacy market.
Such deals between an insurer and a pharmacy company qualify as vertical collaborations and are increasingly being witnessed in the health care space as players equip themselves to face competition from the entry of Amazon.
Notably, Amazon marked its foray into the pharmacy business via the purchase of an online pharmacy delivery company PillPack for $1 billion, last month.
The purchase of Genoa Health, having 400 pharmacies located within community mental health centers, will further strengthen UnitedHealth’s pharmacy benefit management and Specialty Rx business.
The mental health market is slated to grow given the increased incidence of mental disorders, government initiatives for increasing awareness about mental disorders, and the improving accessibility of behavioral health care.
UnitedHealth has actively made a number of acquisitions that as ramped up its growth profile. Acquisitions especially in its Optum segment, its health service business have led to immense growth of this business segment, which provides significant diversification benefits to UnitedHealth. The latest buyout of Genoa Health will also be made in the company’s Optum segment.
From 2014 to 2017, the segment compounded revenues at 24% per year and operating earnings at 26% a year. Revenues and operating earnings further grew 10% and 25%, respectively, in the first half of 2018. A number of acquisitions made in this segment, use of advanced technology, market leading health analytics, modern care delivery and data-driven population health approaches lend Optum a long runway for growth. Each subsegment is expected to deliver a solid performance, driving the over segment’s growth in turn.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>