What You Should Know:
– Private equity firm Advent International announced that it has completed a recapitalization of RxBenefits, the employee benefits industry’s first and only technology-enabled pharmacy benefits optimizer (PBO).
– The transaction values RxBenefits at approximately $1.1 billion.
Advent International (“Advent”), one of the largest and most experienced global private equity investors, today announced that it has completed a recapitalization of RxBenefits, the employee benefits industry’s first and only technology-enabled pharmacy benefits optimizer (PBO), which values the company at approximately $1.1 billion. With this investment, Advent joins Great Hill Partners (“Great Hill”), a leading growth-oriented private equity firm, which first invested in the company in 2016. Advent and Great Hill now each own equal stakes in RxBenefits, alongside a significant investment from the current management team.
Founded in 1995, RxBenefits offers comprehensive “white-glove” service throughout the prescription benefits process for employee benefits consultants, self-funded employers, hospital and health systems, and third-party administrators. RxBenefits serves as a trusted pharmacy adviser to employee benefits consultants and as the pharmacy benefits solution provider of choice for self-insured employers.
The company leverages longstanding partnerships with the leading pharmacy benefits managers (PBMs), a proprietary data management and business intelligence platform, and tailored clinical strategies to deliver unmatched pharmaceutical cost savings to self-insured employers and small and mid-sized businesses (SMBs). The RxBenefits team consists of over 500 pricing, technology, data, and clinical experts providing coverage to more than 2 million members.
The recapitalization will provide RxBenefits with capital to accelerate the build-out of its salesforce, broker channels, and technology and continue executing on its strong growth strategy, both organically and through M&A.
Why It Matters
As of October, pharmaceutical spending was up 6.3% YoY and climbing. In fact, recent forecasts predict a 3.29% increase for pharmaceutical purchases by health systems and a 4.47% spending increase for Specialty drugs in 2021 due to ongoing disruption caused by COVID-19 and other market trends. Rising prescription drug costs have put employers between a rock and a hard place as they struggle to reign in dramatically increasing pharmacy benefit spend while protecting the health of their members, especially in the midst of a pandemic. In fact, over 60% of employers say their prescription drug and medical spend is costly and unsustainable.
RxBenefits is the only company that combines market purchasing power equivalent to that of a Fortune 10 employer, a proprietary technology infrastructure, a data-driven clinical approach and high touch personalized service to optimize the value self-insured employers receive from their pharmacy benefits investment. Its PBO model is in a Category of One.