Centene to Sell Two Pharmacy Businesses for $2.8 Billion

(Bloomberg) -- Centene Corp. will sell two pharmacy businesses it acquired in recent years to separate buyers for a total of $2.8 billion in the latest steps of a portfolio review under new Chief Executive Officer Sarah London.

The health insurer will divest Magellan Rx to Prime Therapeutics LLC and PantherRx Rare to a group of private equity buyers, according to a statement Thursday. Both businesses were acquired in the last two years under Centene’s former CEO, Michael Neidorff. Neidorff died earlier this year soon after stepping down from the role.

Last year Centene took a $1.1 billion charge to resolve claims by several states that the Medicaid insurer inflated pharmacy benefits costs. The divestitures, which are subject to antitrust clearance, are part of Centene’s strategy to exit the pharmacy benefit management market directly and consolidate that part of its health plan operations with an outside vendor.

Centene said it would get $2.8 billion from the sales. The purchasers for PantherRx include The Vistria Group, General Atlantic and Nautic Partners. The company acquired Magellan Rx as part of its deal for Magellan Health Inc. that closed in January. It bought PantherRx in December 2020.

The company faced pressure last year from activist investor Politan Capital Management LP, which led to new appointments to its board.

Centene shares fell 1.5% in trading before U.S. markets opened. 

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