The acquisition of DivvyDose will help UnitedHealth Group to expand its footprint in the rapidly growing digital pharmacy and drug delivery market.
UnitedHealth Group (NYSE: UNH), the largest health insurer of the United States acquired digital pharmacy startup DivvyDose on Tuesday, September 29. Citing sources familiar with the matter, CNBC reported that the acquisition happened in a deal just over $300 million.
The startup specializes in delivering medicines to patients in pre-sorted packages with date and time. Patients can opt for DivvyDoise services just by signing up digitally and uploading their prescriptions online. The startup also accepts all major insurance plans with copays at around 30-day fill price.
The company has yet to comment on the deal. However, industry reports suggest that the talks between the two companies have been going on for a while. The coronavirus pandemic has disrupted businesses making it difficult for small companies and startups to continue operations.
This has helped big and established players to go out on a shopping spree. Especially, healthcare technology seems quite lucrative at this point in time. In its segment, DivvyDose directly competes with Amazon.com Inc (NASDAQ: AMZN) acquired PillPack. Another big player in the segment is Walmart which recently purchased medication management technology from startup CareZone.
The primary reason big players are interested in such startups is to get the medical data about their customers. This also gives them a major footprint in the medical pharmacy market. Also, Amazon has recently ventured into the fitness wearables market. The company announced its Halo Band activity tracker and the Halo subscription service last month.
UnitedHealth Stock Remains Flat after the News about DivvyDose
Pending official confirmation from UnitedHealth Group, the company’s stock showed little to no movement on Tuesday. The UnitedHealth stock was trading flat at $304 on Tuesday. The new deal will also give UnitedHealth Group direct access to virtual pharmacy and provide a new potential customer base for the insurance giant.
The insurance giant has shown active interest to expand its footprint in the digital space by acquiring similar companies in past. Previously, UnitedHealth has signed deals with PatientsLikeMe, and also finalized the AbleTo deal at a whopping $470 million.
Although big players have entered the digital pharmacy space, there are still a few startups actively raising funds. Earlier in January, digital pharmacy and drug delivery company Alto raised $250 million in Series D funding from SoftBank‘s Vision 2 fund. Last year in September 2019, another startup named Capsule landed $200 million in additional funding.
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