Dive Brief:
- Elevance Health said on Monday it closed its deal to acquire infusion and drug therapy company Paragon Health.
- Under the deal, the insurer will expand Plano, Texas-based Paragon’s real estate footprint and scale up operations, according to the announcement. Paragon will operate under CarelonRx, Elevance’s pharmacy services segment.
- An Elevance spokesperson declined to share financial terms of the deal. However, Axios, citing sources familiar, reported the purchase would run Elevance over $1 billion.
Dive Insight:
The deal was first announced in January. Paragon Healthcare serves more than 35,000 patients at over 40 ambulatory infusion centers across eight states.
Elevance said the acquisition aims to expand access to specialty medications for those with chronic illnesses, according to a statement from Pete Haytaian, executive vice president of Elevance Health and president of Carelon.
Carelon is part of Elevance’s “flywheel for growth,” said Gail Boudreaux, president and CEO of Elevance, during the company’s fourth quarter earnings call in January. Boudreaux told investors that Carelon would continue to add capabilities that could “scale rapidly and sustainably over the long term,” and referenced the Paragon acquisition.
“Infusion Services will complement our suite of pharmacy services, which today include a fast-growing specialty pharmacy business and our advanced home delivery service, which launched at the beginning of this year,” Boudreaux said.
In February of last year, Elevance acquired specialty pharmacy BioPlus, which also focuses on providing specialty drug needs to those with chronic conditions, including cancer and multiple sclerosis. BioPlus also operates as a part Carelon.
The most recent deal comes after Elevance Health reported $6 billion in profit for 2023 on revenue of more than $171 billion in January.
The company was hampered by lower than expected Medicare Advantage star ratings in 2023, though four of Elevance’s plan ratings were upwardly revised last week to receive higher stars.
Elevance has taken steps to cut costs including conducting layoffs last month.
