Great Hill Backs RxBenefits Amid Demand for Pharmacy Management
Birmingham, AL -- January 12, 2016 -- RxBenefits, a leading provider of pharmacy benefits administration solutions for small to mid-sized, self-insured employers, today announced that it has received a significant investment from Great Hill Partners. The recapitalization, led by Great Hill Partners and the RxBenefits leadership team, will allow the company to expand its sales and marketing, and product development efforts. The company will also continue to evaluate strategic partnership and acquisition opportunities, with additional equity capital available from Great Hill Partners.
“RxBenefits has experienced rapid growth in recent years and has emerged as a recognized leader in the pharmacy benefits administration space, providing solutions to an underserved segment of the market,” said Bryan Statham, CEO of RxBenefits. “We are pleased to build on this momentum and maximize our full potential by collaborating with a financial partner that has extensive healthcare experience and resources. Together we will execute our strategy of providing innovative, cost-saving solutions and best-in-class customer service.”
Founded in 1995, RxBenefits occupies a unique niche in the healthcare benefits industry as a strategic expert on pharmacy benefit procurement and administration. RxBenefits provides an all-encompassing solution for pharmacy plan management and administration, including pharmacy benefit assessment, plan contracting, plan implementation, member services, claims auditing and reconciliation, and ongoing management of pharmacy benefit plans. The company partners with employee benefits consultants and their clients in the mid-market space that are headquartered in more than 40 states across a diverse array of industry verticals representing hundreds of thousands of members.
The Rx landscape
Last year, prescription drug spending reached a record-breaking $374 billion, up 13 percent from 2013 - the largest percentage increase in over a decade. Breakthrough therapies and specialty drugs were the main driver of the increase.
While specialty medications represent only about 1 percent of all U.S. prescriptions, in 2014 they accounted for more than 30 percent of the total drug spend. And spending is only expected to climb higher: CVS/Caremark, a pharmacy benefit management company, predicts that specialty-drug spending will more than quadruple by 2020, reaching approximately $402 billion a year. By then, specialty drugs will account for 40 percent of employers’ total pharmacy spend, according to the Midwest Business Group on Health.
“There has never been a more important time for employers to look at their general and specialty pharmacy strategy to see if they have optimal pricing terms and identify strategic savings opportunities,” said Mark Taber, a Managing Partner with Great Hill Partners. “With a seasoned management team, a large addressable market, a growing demand – and most importantly, a strong solution – RxBenefits is well-poised to continue its rapid growth trajectory.”
Track record of propelling success of healthcare-technology firms
RxBenefits represents Great Hill Partners’ sixth healthcare technology investment. Prior investments include bSwift (sold to Aetna for $400 million in November 2014), Passport Health Communications (sold to Experian for $850 million in November 2013) and SterilMed (sold to Johnson & Johnson subsidiary Ethicon Endo-Surgery in September 2011). RxBenefits joins Great Hill’s current portfolio, which includes recent healthcare investments Qualifacts (SaaS based behavioral health EHR) and PlanSource (SaaS based employee benefits administration technology).
As part of the transaction, Mark Taber, Rafael Cofiño and Craig Byrnes from Great Hill Partners will join Bryan Statham and Cynthia Johnson on RxBenefits’ Board of Directors. Financial terms of the deal were not disclosed.
For more information about RxBenefits solutions and services, visit www.rxbenefits, or contact your employee benefits consultant.
RxBenefits, based in Birmingham, AL, is a leading pharmacy benefits administration company, focused on employee benefit consultants and their mid-market, self-insured clients. Founded in 1995 and staffed by industry veterans, RxBenefits provides clients with competitive rates, expert management and industry-leading service to all stakeholders in the pharmacy benefit ecosystem including the member, human resources and their employee benefit consultant. For more information, visit www.rxbenefits.com.
About Great Hill Partners
Great Hill Partners is a Boston-based private equity firm that has raised $3.8 billion in commitments since inception to finance the expansion, recapitalization or acquisition of growth companies in a wide range of sectors within the business and consumer services, healthcare, media, communications and software industries. Great Hill targets investments of $25 million to $150 million. For more information, visit www.greathillpartners.com.