Centene Corp.’s investment in RxAdvance, a tech-savvy PBM, is a good strategic fit between a managed care organization and a PBM — particularly because of Centene’s Medicaid managed care population, according to the industry expert Ashraf Shehata.

Centene said March 13 it had invested an unspecified amount in RxAdvance and established a partnership that includes a customer relationship and a strategic investment. Centene and external customers will leverage its Envolve unit’s clinical competencies and RxAdvance’s cloud-based platform.

“The idea of PBMs aligning with [health insurance] plans isn’t news. But the idea [now] is to manage costs across the continuum of care” trying to leverage to a broader cost management opportunity,” Shehata tells AIS Health. “I do think what’s nice about this [Centene/RxAdvance deal] is it seems to be focused on the Medicaid business.”

Specifically, this strategic partnership’s focus on managing high-cost patients and the infrastructure on which RxAdvance is built made it stand out. RxAdvance’s “cloud-based, real-time, analytics infrastructure” also eliminates the need for a payer to make a major investment to move its PBM to the cloud.

As several governors and states are pushing to rein in Medicaid and pharmaceutical spending, demonstrating the PBM platform works when combined with a managed care platform could also open up business opportunities.

Meanwhile, Centene’s move could be a step toward ending its PBM relationship with CVS, a potential client casualty resulting from the Aetna transaction, George Hill of RBC Capital Markets LLC suggested.