4 things to know about the Abarca/LucyRx merger

On Wednesday, Abarca and LucyRx announced that they plan to merge. When the merger is finalized in the third quarter of 2026, they will provide prescription drug services to more than 9 million members and $15 billion in drug spend managed.

The companies will operate as wholly owned subsidiaries of Healthcare Revolution Partners. Leadership will remain unchanged, with David Blair and Jason Borschow continuing as CEO of their respective companies.

David Blair, CEO of LucyRx, and Jason Borschow, CEO of Abarca, spoke to Managed Healthcare Executive about the company’s merger, and the combined company is well-positioned for the PBM market.

Why merge

Blair and Borschow said their companies are complementary in terms of both business fit and shared vision/values. “We both see the broken prescription care delivery model the same way and that it is poised for radical improvement,” Blair said. “There’s going to be a big market share shift, and we can accelerate that shift by working together.”

The combination opens new markets for each: LucyRx, which was founded in 2023, gains access to large health plans/government programs via Abarca; Abarca gains entry into the employer/health-system market via LucyRx. Abarca's business today is about 99% health plans.

Blair and Borschow’s partnership originated from a commercial pilot earlier in the year, where LucyRx ran part of its business on Abarca's Darwin platform.

“There’s an opportunity for our clients to benefit from some of the technology solutions that Jason's team (at Abarca) has developed,” Blair said. “The same is true with the clinical programs that we have that some of Jason's clients may see benefit from. We want to make sure that our clients have access to the best discounts, whether that's retail, mail, specialty, or drug manufacturer rebates.”

Abarca brings experiences in Medicare, Medicaid, and commercial health plan drug benefit management. LucyRx provides pharmacy benefit management services to self-insured employers and labor groups, clinical capabilities, and a specialty care network.

Why merge now

The timing of the merger is intentional, Borschow said. New federal and state regulations have changed the rules on how PBMs operate. “We see that as a trigger to our growth and our success,” he said. “The traditional PBM business model, the one that's existed over the last two or three decades, is essentially over. Scale matters in this next phase.”

More than 30 states now require PBM transparency, audit rights and rebate pass-through. Additionally, the Consolidated Appropriations Act of 2026, which was signed into law in February 2026, provides transparency and accountability requirements for PBMs. It expands reporting on rebates, pharmacy reimbursement and PBM compensation and provides visibility into payments to brokers and consultants. In the commercial market, the law requires rebate pass-through for PBMs serving ERISA plans. In Medicare, PBMs are now required to be paid through fees instead of spread pricing effective 2028.

The combined company’s technology

Abarca's Darwin platform (now called Darwin Healthcare Intelligence) uses AI to reduce costs and also improve the member and provider experience by making workflows much easier. LucyRx’s complementary tech focuses on employer-market care navigation and guiding members to lower-cost options.

Borschow said AI is positioned to help reduce administrative friction of prior authorization, reducing intake time by about 90%. Clinical judgment stays with pharmacists/physicians, he said. A chat/engagement tool called Charlie helps members and providers interact with the PBM directly.

Better positioned for the future

Both Blair and Borschow said the combined company already competes with, and will more strongly compete with, the big three PBMs (CVS Caremark, Express Scripts and Optum Rx). But both said scale will be needed for the future.

“Organizations such as Abarca and Lucy together have the scale to compete in any of the market segments,” Borschow said. “Scale and our approach to doing business are why this is the moment to make this combination happen.”

Blair emphasized that this merger is not about any operational or other kinds of synergies. He said they would consider additional acquisitions of like-minded companies but ruled out vertical integration, citing conflict-of-interest concerns. “That goes back to the fox watching the henhouse, with owning mail and specialty manufacturing drugs and being in the health insurance space. There's zero intention to pursue that direction. We are focused on rebuilding trust in the prescription ecosystem and eliminating potential conflicts of interests,” he said.

He positioned them as the “modern independent PBM” alternative focused on rebuilding trust in the prescription drug ecosystem. In previous interviews with Managed Healthcare Executive, Blair has said LucyRx was founded on the premise of value and being a fiduciary to their clients, providing pharmacy benefit services but with transparency about process and costs.

Blair did not rule out an IPO but said that is a longer-term possibility once the company matures, saying that would provide access to capital, talent and market credibility.

Both Blair and Borschow expect continued consolidation among smaller and midsized PBMs unable to absorb regulatory burden alone. “The response from our clients, from our employees, from the market, and from the consultants and advisors in the market has been unequivocally positive to the announcement that we made on Wednesday,” Borschow said. “It feels very much like the market has been waiting for something like this for quite some time.”