Medco Launches Medical Benefit Management Program to Better Manage Specialty Drug Spending, Coverage Needs

$8 Billion in Waste Targeted in Medication Cost

FRANKLIN LAKES, N.J., Feb. 13, 2012 /PRNewswire/ -- Expensive specialty drugs, which are used to treat rare or complex medical conditions, have been one of the fastest growing categories in health care for nearly a decade, as price inflation and higher utilization continue to increase costs.  Medco Health Solutions, Inc. (NYSE:MHS), has introduced a new medical benefit management program to better manage specialty medications covered under major medical plans by bringing greater efficiencies around the coverage of these drugs.

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Medco and its subsidiary Accredo Health Group, Inc. have successfully assisted numerous clients in shifting coverage of specialty drugs to the pharmacy benefit to gain a better handle on their costs.  With medical benefit management, Medco will now provide greater cost transparency to health plans and employers that wish to continue coverage of specialty drugs under their medical plans.

"We developed this program in order to extend the best practices in specialty pharmacy to major medical coverage," said Frank Sheehy, president of Accredo.  "Historically, health insurers and other payors have not focused on the prevention of waste or the management of specialty drugs that fall within the medical benefit.  This has cost them an estimated $8 billion annually from lack of compliance, over-utilization, non-formulary drug use and other inefficiencies.  We are offering to reduce an administrative burden for health plan sponsors, while also providing an elevated standard of care."

Medco is implementing the new product in partnership with NovoLogix, Inc, an established industry leader in the management of specialty medications within the medical benefit. NovoLogix's software, which has been used to manage medical specialty for over 18 million patients, will provide the infrastructure inside Medco's medical benefit management program.

"We are very excited about our partnership with Medco," says David McLean, CEO of NovoLogix.  "We will provide our technologies and experience in this program with Medco to bring significant value to health insurers and payors to help stem the double digit cost trends that plans and patients are experiencing."

Under the medical benefit management program, Medco will oversee medical policy development, formulary management, prior authorization and coverage rule management, claims management including NDC-based pricing and rebate management for clients. .  This program will coordinate the coverage of these medicines whether Accredo dispenses them to patients or if they are dispensed in a physician's office or another outpatient setting.  Many of these medications have special handling requirements and potentially severe side-effects, demanding a heightened level of interaction between the patient and the clinical team overseeing care.

Major medical plans often have limited means to manage the channel of specialty drugs, which include treatments for cancer, HIV, hemophilia, rheumatoid arthritis, multiple sclerosis and other complex medical conditions.  The emergence of these medications during the past decade has escalated the annual cost of these drugs, which start at approximately $6,000 and reach as high as hundreds of thousands of dollars for treatments of rare conditions.  Accredo focuses on ensuring these medicines are used correctly; it also works to limit waste, coordinates coverage, and engages clinicians about the care being provided for those receiving specialty drugs. 

Proper management of specialty drugs is essential given their tremendous costs.  The drug trend in this category grew 17.4 percent in 2010, the fastest pace since 2004. Utilization of specialty drugs grew almost three times faster than overall utilization. Specialty unit cost grew more than seven times faster than overall unit costs.  The expanded patient populations of these drugs is one of the variables that drove the 5.9 percent utilization increase seen in 2010.  Unit cost increases for these drugs surged 11.5 percent during 2010.

About Accredo Health

Accredo Health Group, Inc., a wholly-owned subsidiary of Medco Health Solutions, Inc., provides specialized pharmacy and related services pursuant to agreements with biotechnology drug manufacturers relating to the treatment of patients with certain costly, chronic diseases.  Accredo's services include collection of timely drug utilization and patient compliance information, patient education and monitoring through the use of written materials and telephonic consultation, reimbursement expertise and overnight drug delivery.

About Medco

Medco Health Solutions, Inc. (NYSE: MHS) is pioneering The world's most advanced pharmacy® and its clinical research and innovations are part of Medco making medicine smarter™ for millions of Americans.

With more than 20,000 employees worldwide dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2010 revenues of $66 billion, Medco ranks 34th on the 2011 Fortune 500 list and is named among the world's most innovative, most admired and most trustworthy companies. 

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About NovoLogix, Inc.

NovoLogix, Inc. is a health information technology company developed and led by professionals with significant experience in the areas of technology, clinical services and managed care.  The company is dedicated to driving healthcare innovation. Throughout its history, the company has introduced revolutionary ideas, advanced processes and pioneering technologies to many of the nation's leading health plans and thousands of healthcare providers.

Through the Software-as-a-Service (SaaS) platform, NovoLogix delivers innovative software solutions to the medical pharmacy industry. The NovoLogix software enables clients to stay ahead of the shifting healthcare landscape, changes in the administration and sites of care, and other competitive forces affecting their bottom line.

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

SOURCE Medco Health Solutions, Inc.