McKesson has entered into a definitive agreement to acquire CoverMyMeds, a developer of electronic prior authorization technology, for $1.1 billion or $0.9 billion net of cash incremental cash benefits, the companies announced Jan. 25.
The agreement also includes a maximum $0.3 billion of consideration contingent upon CoverMyMeds’ financial performance through the fiscal year ending in 2019. Officials said the transaction is subject to customary closing conditions, including regulatory review and is expected to close in the first half of fiscal year 2018.
The acquisition will strengthen McKesson’s technology products to pharmaceutical manufacturers, clinicians and payers, officials said. CoverMyMeds has partnered with McKesson’s RelayHealth Pharmacy since 2010.
Under the agreement, CoverMyMeds will continue to operate as an independent business unit under its existing leadership headed by co-founders Matt Scantland, CEO and Sam Rajan, sales leader.
“We’re excited to build on our long-term partnership so that the combined capabilities of both companies are used to bring even more innovative solutions to pharmacies, providers, payers, manufacturers and patients,” CoverMyMeds officials said.
The “acquisition of CoverMyMeds supports McKesson’s commitment to provide a comprehensive set of services and solutions that drive value across the healthcare continuum and secure patients’ access to their prescribed drugs,” McKesson’s Chairman and CEO John H. Hammergren, said in a statement. “McKesson continues to further enhance its diverse suite of pharmaceutical technology solutions to support the very best in patient care.”