Allscripts acquires prescription drug startup ZappRx

Mergers and acquisitions deals consolidation
Allscripts says the specialty drug prescribing space is a key focus area for its payer and life sciences business unit Veradigm. (Getty/Kritchanut)

Health IT vendor Allscripts has acquired specialty drug prescribing startup ZappRx in a move to further diversify its business outside of electronic health records (EHRs) and to bolster its Veradigm e-prescribing business.

The news, first reported by CNBC Thursday, was confirmed by Allscripts Friday.

"Allscripts is excited to add ZappRx’s platform to our growing portfolio. The specialty-prescribing space is a key focus area for Veradigm, our payer and life sciences business unit. The addition of ZappRx’s team and technology will augment our solution offerings and provide great value to our clients," Concetta Rasiarmos, spokeswoman for Allscripts, said in an emailed statement. 

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The terms of the deal were not disclosed, but CNBC cited two people familiar with the deal who said the price was less than the amount raised in venture capital.

Founded in 2012 by former Athenahealth executive Zoe Barry, Boston-based ZappRx has raised more than $42 million in venture capital funding. Investors include Google Ventures, Alphabet’s early-stage venture arm, and SR One, the venture capital firm founded by pharmaceutical giant GlaxoSmithKline.

RELATED: Allscripts CEO says size, scale will be key to success in EHR market

ZappRx built a cloud-based platform that aims to streamlines the process required to order specialty medications. The company works to increase efficiencies in administrative tasks like prior authorization associated with prescribing specialty medication. The company has recently inked deals with large customers, such as Bayer in January and global biopharma company Genentech in December 2018.

The acquisition comes as the company races to own the e-prescribing space. Just a year ago, Amazon bought online pharmacy PillPack, which sorts and delivers medications directly to consumers.

Allscripts' core business is in the EHR space, including acquiring McKesson's health IT business and its Paragon EHR platform in late 2017 as well as Practice Fusion in early 2018. But the company began making moves to expand beyond the EHR market with its acquisition of HealthGrid, a patient engagement platform, last May.

RELATED: Amazon’s acquisition of online pharmacy PillPack spooks retail drugstores

Practice Fusion has since been rebranded as Veradigm with a focus on the payer and life sciences markets. This year, Veradigm announced a partnership with NextGen Healthcare to enable data exchange between providers and health plans, insurance companies, laboratories and research organizations. Veradigm also is teaming up with Microsoft to develop a platform for clinical research.

In an interview during the Healthcare Information and Management Systems Society conference back in February, Allscripts CEO Paul Black said the company was focused on continuing to build additional capabilities around the payer and life science areas, and the ZappRx acquisition plays into that strategy.

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