Big win for Catalyst Health Solutions, which renewed its contract to administer pharmacy benefits for 1.2 million Wellmark Blue Cross Blue Shield of Iowa and South Dakota members following a competitive bid. Shares in Catalyst are up 2% in afternoon trading today on word of the seven-year pact. Wellmark accounted for 18% of Catalyst revenues in 2009, making it the company’s biggest client.
It’s been a busy couple of months for Catalyst. In August, for example, Catalyst agreed to acquire FutureScripts, the 1-million member PBM unit of Independence Blue Cross, in a deal valued at $225 million. The agreement includes a 10-year contract for Catalyst to provide PBM services to Independence.
Michael Minchak of J.P. Morgan projects that the Wellmark and Independence accounts will generate $1.3 billion in revenues for Catalyst in 2011, representing 25% of total projected company revenues for the year. “This should help to minimize some renewal risk going forward,” Minchak says, adding, “The company should see less than the typical one third of its book up for renewal in any given year.”