NAVLIN BRIEF:
On November 9, 2022, Elevance Health entered into an agreement with CarepathRx, a portfolio company of Nautic Partners, to acquire BioPlus, a comprehensive specialty pharmacy (SP). The transaction details are undisclosed.
- The deal—expected to close in the first half of 2023—enables Elevance Health to move toward its integrated whole-health goals by internalizing SP capabilities and reducing its IngenioRx PBM’s reliance on CVS Health.
Who is BioPlus?
Headquartered in Altamonte Springs, Florida, BioPlus Specialty Pharmacy is among the nation’s leading independent SPs. It has gained a reputation for deep therapeutic expertise across complex, high-cost conditions, especially oncology. Its high levels of physician/provider loyalty and innovative tech-enabled solutions drive an industry-leading Net Promoter Score (NPS), recently scoring highest NPS among the surveyed independent SPs in Zitter Health Insights’ Specialty Pharmacy Office Staff Satisfaction Survey.
Key Facts
- Background: Founded in 1989, acquired by CarepathRx in April 2020
- Employees: 350-400 FTEs
- Revenue: Approximately $750M (source: AlphaSense)
- Target Conditions: Focuses heavily on oncology, autoimmune conditions, hemophilia, and multiple sclerosis.
- Operations: Licensed in all 50 states; operates an SP in Florida and maintains a satellite office in North Carolina. Launched a California-based SP in September 2021 and acquired Santa Barbara SP shortly thereafter.
- Prescribers: Relationships with more than 6,000 prescribers across the US.
- Infrastructure: Strategic collaboration with Amazon Web Services in December 2020 to modernize its systems and support growth while reducing the operational costs of infrastructure, which aligns with the company’s commitment to provide fast and easy SP services.
- Patient Onboarding: The process starts with a two-hour patient acceptance guarantee, and then prescriptions move through the ‘2 Day Ready 2 Ship’ process.
- Patient Financial Support: Throughout the process, a BioPlus copay assistance team helps provide access to specialty medications and ensures that financial hardships are not a roadblock to patient treatment. In 2020, BioPlus patients received an average of $8,000 in financial assistance from outside sources to reduce patient out-of-pocket treatment costs.
- Patient Access: In July 2022, the company announced its ‘Hope Delivered in 24 Hours’ program, guaranteeing that all formulary generic oncology medications are ready to be shipped to patients within 24 hours of receiving a complete physician referral.
How will BioPlus support Elevance Health?
Elevance Health’s acquisition of the BioPlus SP takes the payer a step further toward an integrated medical-pharmacy capability. After announcing plans for its own PBM in 2017, IngenioRx launched as a hybrid model in mid-2019, balancing an internal and external PBM model with significant services leveraged through CVS. Since its launch, IngenioRx grew to serve more than 835,000 employer carve-out lives (not including Elevance Health lives) across all the 50 states and DC.
In its Q3 2022 earnings call, Elevance Health reported a strong growth in its services businesses, IngenioRx and Carelon. IngenioRx reported a 11% increase in its year-over-year revenue and continues to improve its commercial market penetration, especially among self-funded employers, but is hampered by its inability to achieve a truly integrated whole-health care delivery.
“As it relates to IngenioRx and our pharmacy franchise and our specialty strategy, we feel very good about the things we’re doing today. We have robust condition management programs and are very focused on specialty there. We have manufacturer copay assistance programs that we’ve been building out and joining forces with employers and actually generating value for Ingenio, and also a lot of value for our customers. We have site of care strategies where patients are accessing specialty pharmacy or providers from the best sites of care, and that’s creating affordability … In terms of what we’re doing strategically, we are very interested in the specialty space and broadening our capabilities in that space…” -President, Carelon (Q3 2022 earnings call, shortly prior to BioPlus announcement)
Implications – Tailwinds
- Strong overall SP services: BioPlus SP brings to IngenioRx a highly satisfied regional health plan and employer base, strong customer and clinical service model, robust technology and analytics, and efficient SP distribution.
- Holistic, high-cost complex care management: Elevance Health builds on BioPlus’ oncology and multiple sclerosis Centers of Excellence (COEs), likely adding other high-cost therapeutic area COEs over time.
- Member and Provider engagement platform: Adding BioPlus SP’s digital capabilities to the new IngenioRx PBM platform elevates IngenioRx’s value proposition to other Blue Cross Blue Shield plans, particularly CVS Health/CVS Specialty customers looking to improve SP services while shifting business away from a competitor.
- BioPlus brings a variety of notification programs, portals, and mobile apps to both patients and providers.
Implications – Headwinds
- Potential for long time to value: It is unlikely that BioPlus SP will impact Elevance Health’s ability to deliver deeper, more holistic condition management until mid- to late-2024. Elevance is just beginning to truly realize the benefits of integrated mental and physical health services from its acquisition of Beacon Health Options in March 2020.
- Eventually, Carelon will connect its businesses through BioPlus SP’s digital platform so when BioPlus SP’s pharmacy team identifies a patient who needs behavioral health support or in-home care services, the team is able to connect that patient with the relevant services.
- Eliminates the need for CVS Specialty but does not cut ties with CVS Health: Elevance Health has been slow to market vs other leading payers in offering integrated medical and pharmacy solutions and still relies on CVS Health to deliver a full suite of PBM capabilities. As a result, the BioPlus SP acquisition feels like a “me too” move – albeit one with significant potential to drive patient and provider satisfaction.
Learn more about NAVLIN by EVERSANA and our innovative market research solutions