Express Scripts Acquires Verity Solutions to Expand 340B Drug Pricing Program Services

On October 21, 2019, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that Express Scripts, the pharmacy benefit management company under U.S. insurer Cigna, announced the acquisition of Verity Solutions, a biotech startup based in the Seattle area. No financial terms of the acquisition were disclosed.

Upon completion of this acquisition, Express Scripts plans to expand the scope of its services under the federal 340B program, while Verity Solutions will continue to operate as an independent division.

The 340B Federal Program, also known as the 340B Drug Pricing Program. This program requires pharmaceutical manufacturers to provide discounted prices on outpatient drugs (including prescription drugs and biologics other than vaccines) to certain healthcare providers or hospitals. The program benefits many low-income uninsured individuals, Medicaid enrollees, and other vulnerable populations, while also reducing drug costs for healthcare organizations serving these underserved groups.

Verity Solutions is a biotechnology company founded in 2002. The company provides 340B software and services to hundreds of integrated healthcare systems, acute care hospitals, pharmacies, and other eligible 340B covered entities across the United States. Verity Solutions offers targeted support to healthcare organizations, dedicated to maximizing the success rate of the 340B Program. Initially, Verity was part of Talyst, a pharmacy automation company. In 2015, when Talyst was acquired by the investment group Columbia Pacific Advisors, Verity Solutions was spun off as an independent company. The leadership team at Verity Solutions includes CEO George Puckett, CTO Mark Cassidy, and CFO Jon Sortland. According to George Puckett, the company currently has 85 employees and plans to grow to more than 100 by the end of next year, while retaining its current leadership and staff.

Verity Solutions is dedicated to enhancing 340B products and advancing the implementation of the federal 340B program. Richard Fade, a partner at Ignition Partners, an early investor in Verity Solutions, stated in a press release: “Five years ago, George Puckett and the Verity Solutions team set out to significantly improve the 340B products available on the market. Verity Solutions’ cloud-based software for pricing sold pharmaceuticals can easily meet the diverse needs of customers and enable the creation of new services.”

Cigna is a health services company with more than 40,000 employees. The company’s mission is to improve customers’ health and well-being and enhance their sense of security in health matters through the power of healthcare. All of Cigna’s products and services are provided exclusively by the company or through its operating subsidiaries, including Connecticut General Life Insurance Company, Cigna Health and Life Insurance Company, Life Insurance Company of North America, and Cigna Life Insurance Company. The company has expanded its business operations to 30 countries and regions, serving over 95 million customers worldwide.

Express Scripts, founded in 1986, is a pharmacy benefit management company and one of the largest pharmacies in the United States, serving over 85 million people. Express Scripts provides network pharmacy claims processing and home delivery services. Additionally, the company distributes a full range of biopharmaceutical products and offers extensive cost management and patient care services. On December 20, 2018, Cigna announced the formal acquisition of Express Scripts for $67 billion, making Express Scripts a subsidiary of Cigna.

(Compiled by Wang Fang)