200 Lose Jobs in Closure of Health Care Unit

The acquisition of the pharmacy benefits management business of Wellpoint by Express Scripts has resulted in the closure of a West Hills office and the loss of more than 200 jobs. St. Louis-based Express Scripts closed on its $4.6 billion deal for NextRx in December and several months later began cutting employees from the contact center on Fallbrook Avenue. Staffing cuts will continue through November, according to Worker Adjustment and Retraining Notifications filed with the state Employment Development Department. An Express Scripts spokesman refused to make a company representative available to discuss the closure. The company is among the largest acting as an intermediary between pharmaceutical companies and pharmacy chains and employers to offer drugs at a less expensive cost. Express Scripts also operates a service to send prescription drugs through the mail. The sale of NextRx is evidence of consolidation in the benefits industry and a move that increases the market share held by Express Scripts. Only Medco Health Solutions Inc. and CVS Caremark are larger. NextRx ranked fourth in pharmacy benefit managers at the time of its sale to Express Scripts. The West Hills offices employed primarily white collar workers, with clinical pharmacists being one of the largest groups to be laid off. The NextRx home delivery business is now being handled by Express Scripts, which this year opened a brand new mail order distribution plant near its Midwestern headquarters. The Canoga Park-West Hills WorkSource Center had not been contacted about having its rapid response team work with the displaced employees. There had been indications that there would be more consolidation in the pharmacy benefits sector but other companies that had been expected to sell did not. There are advantages to having less competition, such as being able to get discounted drugs, said Jeff Jonas, an analyst with Gabelli & Co. Inc., a New York firm that tracks Express Scripts. Moving the mail order fulfillment to other sites made sense as those buildings tend to be expensive to build. “(Express Scripts) have a couple of those facilities and they were able to use some excess capacity there,” Jonas said. For the first quarter ending March 31, Express Scripts had net income of $260.2 million, or $0.94 per diluted share, on revenues of $11.1 billion. That is a 21 percent increase from the net income of $214.4 million, or $0.86 per diluted share, on revenue of $5.4 billion for the same period in 2009.