Throwing their weight around

27 October 2003 By Robert Cyran Follow @rob_cyran

It will be a powerful counterweight to big pharma, potentially driving down drug prices which are higher in the US than elsewhere. Anthem’s $15bn acquisition of WellPoint will create a behemoth controlling health spending for 9% of the US population.

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Anthem has agreed to acquire WellPoint Health Networks for $15.2bn in cash and stock, as well as $1.2bn in assumed debt. The combined health management company would be the second largest in the US, controlling spending for 9% of the population.

In a related move, UnitedHealth Group the largest health benefits company – agreed to acquire Mid Atlantic Medical Services for nearly $4bn in cash and stock.

These moves are just the latest in a whirlwind of mergers as US managed care companies seek economies of scale and greater bargaining power against pharmaceutical companies. Anthem and WellPoint are themselves the result of repeated mergers.

The US is the world's most important market for pharmaceuticals, accounting for nearly half of total expenditure. Health management companies have taken a more aggressive stance at controlling US drugs spending in the past few years, with WellPoint being one of the most active.

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