By Dave Ranney
KHI News Service
TOPEKA, Jan.
4
The state employees” prescription drug program has renewed its contract with Caremark Rx Inc.
Effective Jan. 1, the three-year contract is expected to save the state $3.2 million a year.
“This is really an awesome contract,” said L.J. Fredrickson, director of the state employees” health plan. “It”s going to help us manage our money better. We”re going to be getting some additional rebates that will reduce both the state”s costs and employees” costs.”
Under the new contract, the state plan will be allowed to pool its purchasing power with other buyers, creating potential for additional savings.
“This contract is going to help us better manage the big picture
from the pharmacy level, the state-employee level, the health-plan level,” Fredrickson said.
Caremark was one of nine companies to bid on the $60 million-a-year contract.
“This contract creates an opportunity for us to pool our buying power,” Fredrickson said. “The others didn”t.”
Caremark has run the state employee”s prescription drug program since 2004 when it bought the incumbent contractor, AdvancePCS.
The state self-insures 34,883 state employees and 65,201 dependents.
The new Caremark contract includes programs designed to:
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Curb misuse and abuse of controlled substances;
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Start an electronic prescription program;
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Increase discounts and rebates.
The list of preferred drugs and participating pharmacies will not change. Premiums will not increase.
Headquartered in Nashville, Tenn., Caremark is the nation”s second largest prescription-drug benefits manager, administering more than 2,000 public and private health plans throughout the United States.
The company is the subject of a hostile takeover involving two companies: Express Scripts Inc. and CVS Corp.
Express Scripts, the nation”s third largest manager of pharmacy benefits, has bid $26 billion for Caremark. CVS has bid $21 billion.
A group of Caremark investors wants the company to take the Express Scripts bid. Caremark executives favor the CVS bid.
Caremark”s network includes more than 60,000 pharmacies, seven mail service pharmacies, and the industry’s only FDA-regulated repackaging plant.
Dave Ranney is a staff writer for KHI News Service, which specializes in coverage of health issues facing Kansans. He can be reached at
dranney@khi.org
or at 785-233-5443, ext. 128.