Amid significant shifts in the pharmacy benefit management industry, LucyRx and Abarca Health have revealed plans to merge to build the scale necessary to compete in this changing landscape.
Last week, the companies announced that the union would create Healthcare Revolution Partners, which will serve as the parent organization to both LucyRx and Abarca as they carry the existing brands forward. Abarca CEO Jason Borschow and LucyRx CEO David Blair will serve as co-chairs of the new organization and maintain their CEO titles once the deal closes.
The merger is expected to close in the third quarter of 2026, pending regulatory approval, per an announcement. The combined organization will serve more than 9 million members across the country.
Blair told Fierce Healthcare in an interview that the merger will allow the companies to "become the only modern independent PBM with the track record and scale to serve both commercial and government programs."
Lucy has largely focused its efforts to date in working with employers and unions and as a third-party administrator, while Abarca has built out deep relationships in government programs and with large insurers.
"I think that says a lot, because if you think about how our businesses complement each other ... it's really just a fabulous marriage," Blair said.
Borschow said the two teams go to know each other through a shared commercial client, in which last year LucyRx implemented a piece of Abarca's proprietary Darwin Healthcare Intelligence platform, which supports an array of payer needs from care coordination to empowering member choice.
From that point, the similarities between the companies became more evident, he said.
"Through the process we realized that the culture, the vision, the values of the organizations were highly aligned, and that's not common in this industry, and healthcare in general," Borschow said. "That really brought us closer together to have different conversations of how we can meet the moment in the market."
A key goal is to maintain continuity for existing clients, who will not feel any day-to-day disruption as the teams will remain separate, the companies said. Coming together, however, allows both to continue to build for the future, especially as rising costs lead more employers and plans to consider alternatives to the traditional PBMs.
As healthcare costs rise, driven in large part by pharmaceuticals like GLP-1s, employers are expecting PBMs to step up and support them in managing cost. For example, a June 2025 report from Pharmaceutical Strategies Group found a growing awareness among employers about "unbundling," in which PBM services are built in a more modular fashion with multiple vendors, rather than relying on one organization for every service.
The most prominent example of this is Blue Shield of California's Pharmacy Care Reimagined model, in which the insurer ended its more traditional PBM contract with CVS Health's Caremark to lean on five different partners to provide different services. Abarca is one of the vendors involved in the program, Borschow noted.
Beyond pressure from clients, PBMs have faced significant pressure from legislators and regulators, too. In February, Congress passed multiple industry reforms as part of the Consolidated Appropriations Act.
"The Consolidated Appropriations Act that passed earlier this year is kind of that final trigger point to the end of the current PBM model as we know it, and that's creating a huge tailwind for modern, transparent, independent PBMs like Abarca and Lucy," Borschow said.
Blair said that part of the appeal of alternative PBMs like LucyRx and Abarca is that they're not vertically integrated with insurers or pharmacies, and they're not affiliated with drug manufacturers, either. That transparency is appealing to potential clients who are fed up with the status quo, he said.
The merger is instead aimed at building the scale necessary to reach new potential client bases, Borschow said, such as large employers. Given the interest, he said he expects to see perhaps not a new "Big Three" for the industry but the emergence of new leaders for the industry.
"I think you'll see significant market share shift over the next several years," Blair said. "There'll be new entities that have captured the lion's share of the market share by embracing some of the characteristics that we described."