Abarca Health and LucyRx announced last week that they are combining to build an independent pharmacy benefit manager serving commercial and government clients. Together, they’ll support more than 9 million members in the U.S.
San Juan, Puerto Rico-based Abarca Health is an independent PBM primarily serving large health plans. Bethesda, Maryland-based LucyRx, meanwhile, is also an independent PBM serving employers and third party administrators.
“At LucyRx, we have focused on employer groups, TPAs, unions, some local governments, but small organizations. No retirees, just commercial lives, and we’ve spent a lot of time investing in clinical solutions. … You’ll find [Abarca] has focused keenly on really large group business. I think some of the largest health plans in the country, government programs invested significantly in their technology. So the businesses very much complement each other,” said David Blair, CEO of LucyRx, in an interview.
The companies will operate as separate subsidiaries under one parent company called Healthcare Revolution Partners. Blair will continue to serve as CEO of LucyRx, while Jason Borschow will continue to serve as CEO of Abarca Health.
The terms of the deal were not disclosed. The transaction is pending regulatory approvals and is expected to close in the third quarter of 2026.
According to Borschow, now was the right time for Abarca Health and LucyRx to pursue combining as traditional PBMs face scrutiny both at the federal and state level. This includes the Big Three, which are owned by large insurance companies — CVS Caremark, UnitedHealth Group’s Optum Rx and Cigna’s Express Scripts.
Congress recently passed PBM reform via the Consolidated Appropriations Act of 2026, which includes the delinking of PBM compensation from the price of a drug in Medicare Part D and more detailed reporting to plan sponsors. The Department of Labor also recently proposed a rule cracking down on PBMs, and states like Tennessee are passing laws against PBMs as well.
“We see all of that as a disruptive tailwind for people like us,” Borschow said in an interview. “The traditional PBM model is over as we know it, and that space is meant to be filled by companies like Abarca and Lucy. And given the complementarity of our businesses, the alignment of our vision, we believe that putting our businesses together into a company with combined scale that really matters and can compete was the right thing to do at this time.”
Five years from now, Blair hopes there can be a new Big Three in the PBM space, focused on being independent, with Healthcare Revolution Partners among them. Borschow added that he hopes perceptions of PBMs will improve over time.
“PBM is not a word that when it’s heard in any sector today, there’s a positive association with it,” Borschow said. “It’s an industry that has lost its way, and that has lost its credibility. Five years from now, our hope and our expectation is that when we talk about how we do PBM, it’ll be one where people say, ‘Wow, we built trust in the prescription ecosystem, and we did it together.’”
Photo: nespix, Getty Images
