The story
Founding
Express Scripts began in 1986 in St. Louis County, Missouri as a result of a joint venture between a retail chain of more than 79 pharmacies (Medicare Glaser Inc.) and Sanus Corp. Health Systems.
Sanus traces its history to Bradford Systems and Administrative Services which was founded in Boston in 1968. Bradford had a contract for computer processing of Medicare and Medicaid payments. It was acquired in 1981 by McDonnell Douglas through its McDonnell Automation Company (McAuto) subsidiary for $11.5 million.
In 1983, two of McDonnell Douglas' former principals Joseph T. Lynaugh (a former director of NYC Health + Hospitals in New York City), the McAuto's project manager of the Bradford takeover, and Howard L. Waltman, a long time Bradford's employee, formed the Sanus Corporation with substantial investments and ownership from McDonnell Douglas, including a McDonnell Douglas whole ownership of the St. Louis office. General American Life Insurance Company invested in Sanus's future, the largest part of the funding based in New York. Sanus was a health maintenance organization and it merged with the General America Life Insurance preferred provider organization. Sanus rapidly grew and by 1986 it had 200,000 clients and $100 million in revenue, operating in the St. Louis, Dallas, Fort Worth, Houston, and Washington, D.C. markets. It created a subsidiary called GenCare to fill prescriptions.
In late 1986, Sanus announced a deal with St. Louis based pharmacy Medicare-Glaser for fulfilling prescriptions. The deal was a 50-50 split ownership between Sanus and Medicare-Glaser, with the new name of Express Scripts (scripts being medical industry jargon for prescriptions). Initial plans called for Missouri and Illinois clients to get their prescriptions at the Medicare-Glaser brick and mortar pharmacies while those in other cities could get their prescriptions via mail order—an innovation at the time. The initial report of the creation said that Charles H. Ridings, formerly in charge of McDonnell Douglas mergers and acquisitions, was named the first chief executive, although he was quickly replaced by Waltman.
Sanus remained the dominant early insurance customer but Express Scripts began marketing to other providers. With increased investment by New York Life, Sansus change its name to NYL Cares and in 1998 was sold to Aetna for $1.05 billion.
Glaser Drug Company sold its Express Scripts partnership interest back to Sanus before it was acquired by chain SupeRx in 1989 for $18.2 million. SupeRX declared bankruptcy and all stores closed in 1991 after Walgreens acquired the pharmacy records. SupeRX's loan to buy Glaser Drug Co. had been financed by Lincoln Savings and Loan Association. Morris Glaser had founded the company on October 1, 1924. In 1959, Glaser opened discount pharmacies, which would be called Medicare Pharmacy. The discount pharmacies were designed to resemble a doctor waiting room and were only about 800 to 1,000 square feet which focused just on the prescriptions. The two companies although sharing the same name operated separately, peaking at 100 stores.
General America, which had been a private St. Louis-based insurance since 1933, was acquired by MetLife for $1.2 billion in 1999. General America had run into financial problems and had said it could not pay back $6.8 billion in short term bonds to investors.
1989-1999
Express Scripts was purchased by New York Life Insurance Company in 1989 and became a publicly traded company in 1992. In 1993, Express Scripts signed on both FHP International and Maxicare Health Care and corporate clients Lockheed, Service Merchandise, and Ingersoll-Rand. In 1994, the company expanded its services by adding workers’ compensation prescription services and reinsurance. In 1994, the company announced a two-for-one stock split, and in 1996 established Express Scripts Canada. The same year, the company began the annual Drug Trend Report and launched the Outcomes Symposium Conference.
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In April 1998, Express Scripts acquired ValueRx, the PBM business of Columbia/HCA Healthcare Corp. The following year, in April 1999, the company purchased Diversified Pharmaceutical Services from SmithKline Beecham Corp for $700 million. That same year, the company purchased stock in PlanetRx.com. This partnership offered members options for purchasing prescriptions and over-the-counter health products online.
2000-2009
In 2000, the company had to write off its $165 million relationship with PlanetRx.com when the startup experienced financial difficulties. In 2001, Express Scripts partnered with Merck-Medco and Advance PSC to form RxHub LLC.
In 2002, Express Scripts, Inc. (ESI) acquired National Prescription Administrators, Inc. (NPA).
In 2003, Express Scripts won a contract to manage the Tricare pharmacy home delivery program for the US Department of Defense; in 2008, Express Scripts won a further contract to manage all Tricare prescription services.
In late December 2006, Express Scripts made a proposal to purchase Caremark. Express Scripts lost the race to acquire Caremark to CVS Corporation, which became CVS/Caremark Corporation on March 22, 2007.
In October 2007, Express Scripts acquired ConnectYourCare, and now handles FSA, HRA and HSA accounts for companies such as Suntrust, Zions Bancorporation and Allegis. However, Express Scripts divested ConnectYourCare in August 2012.
On April 13, 2009, it was announced that Indianapolis-based WellPoint (now Anthem) had agreed to sell its NextRx subsidiaries for $4.675 billion to Express Scripts. Express Scripts closed the transaction in December 2009.
2010-present
In April 2012, Express Scripts completed a $29.1 billion acquisition of Medco Health Solutions. The Federal Trade Commission gave formal approval on April 2, 2012 after an anti-trust investigation. The acquisition positioned Express Scripts Holding Co. as the largest pharmacy benefit manager, filling 1.4 billion annual prescriptions.
In 2017, Express Scripts launched Inside Rx, a partially owned subsidiary that provides discounts on medications for the uninsured and underinsured. In July 2017, Express Scripts purchased myMatrixx, a workers' compensation pharmacy benefits company based in Tampa, for $250 million.
In October 2017, Express Scripts lost its biggest client, Anthem, which said it would not renew the PBM contract in 2019 and would instead use CVS Health. Anthem alleged in court filings that Express had overcharged it by $3 billion. Anthem said that it would launch its own competing PBM service, IngenioRx. The battle between the two companies in 2017 caused Express Scripts stock to drop by nearly a third. Express Scripts announced its acquisition of eviCore in October 2017. The $3.6 billion deal closed that December. In November 2017, Express Scripts announced it was divesting United BioSource Corp. (UBC), its pharmaceutical support business. UBC was sold to Avista Capital Partners.
In March 2018, Cigna, which earlier was blocked by courts from being acquired by Anthem, announced a $67 billion deal to acquire Express Scripts. The Express Scripts acquisition would be the last major deal involving the country's largest PBMs. In 2017, CVS Health announced a merger with Aetna, completing in November 2018. The takeover of PBMs have drawn regulator resistance because of fears they foster an anti-competitive environment. Insurance companies have charged that the PBM model has contributed to high drug prices because PBMs take a commission on each transaction.
In December 2018, it was reported that Walmart and Express Scripts extended its network agreement to give Express Scripts' clients access to Walmart's prescription services.
In December 2019, Express Scripts entered into a three-year partnership with Prime Therapeutics.
In late 2020, Express Scripts and several subsidiaries were rebranded and reorganized into a distinct health services organization, Evernorth. Evernorth CEO Tim Wentworth retired at the end of 2021 and Cigna veteran executive Eric Palmer became Evernorth CEO starting in 2022.
From Wikipedia’s article on Express Scripts, shared under CC BY-SA 4.0.7