Centene’s Agreement to Acquire Magellan Health Bolsters Medicaid Business

Centene Corporation (Centene) offers affordable and high-quality products to nearly 1 in 15 individuals across the nation, including Medicaid and Medicare members (including Medicare Prescription Drug Plans) as well as individuals and families served by the Health Insurance Marketplace, the TRICARE program, and individuals in correctional facilities.

Centene also serves several international markets, and contracts with other healthcare and commercial organizations to provide a variety of specialty services focused on treating the whole person. 

Magellan Health is a leader in managing the fastest growing, most complex areas of health, including special populations, complete pharmacy benefits and other specialty areas of healthcare. Magellan Health customers include health plans and other managed care organizations, employers, labor unions, various military and governmental agencies and third-party administrators.

The transaction brings together the companies’ complementary capabilities in behavioral health, specialty healthcare and pharmacy management. As a result of the transaction, Centene will establish one of the nation’s largest behavioral health platforms across 41 million unique members with enhanced capabilities to deliver better health outcomes for complex, high-cost populations. 

Magellan Health will also add to Centene’s leadership in government sponsored healthcare, bringing 5.5 million new members on government-sponsored plans. Magellan Health also provides specialty health services for 18 million third-party customer members in addition to Centene’s own members.

The transaction also adds 2 million PBM members and 16 million medical pharmacy members, enhancing the scale of Centene’s pharmacy platform with leading capabilities in specialty drug management.

Magellan Rx Management, a division of Magellan Health, is a next-generation pharmacy organization. As pioneers in specialty drug management, industry leaders in Medicaid pharmacy programs and disruptors in pharmacy benefit management, it partners with customers and members to deliver a best-in-class healthcare experience.

Centene’s Envolve Pharmacy Solutions transforms the traditional pharmacy benefit delivery model through flexible services that improve outcomes for members and manage costs for plan sponsors. A combined pharmacy benefit and specialty drug management solution, Envolve Pharmacy Solutions had served over nine million members across the United States.

The transaction adds significant PBM growth opportunities to Centene with mid-sized health plans. Centene also has a leading position in Specialty Rx with opportunity to grow share and expand integrated care management capabilities.

The acquisition complements Centene’s recent acquisition of PantherRx, who transforms lives by delivering medical breakthroughs, clinical excellence, and access solutions to patients afflicted with rare and devastating conditions.


Takeaway: Magellan Medicaid Administration (MMA), if included in the acquisition, brings 26 state contracts for various administrative services, management of 2 of the 3 rebate pools for FFS Medicaid, and a very robust supplemental rebate program