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Medco Announces Program to Curb Spending on Specialty Drugs

Randi Hernandez, Associate Editor/Online
Published Online: Thursday, February 23, 2012
A new plan to eliminate waste, promote adherence, and coordinate coverage of expensive specialty medications is announced by Medco.


Medco, in partnership with software developer NovoLogix, announced a new program that will help lower the cost of specialty drugs for health plans and employers and provide increased transparency about the cost of specialty drugs. Specialty medications are more expensive than other categories of drugs; they are among the top 10 selling drugs worldwide by revenue, according to data from Medco.

The Medco plan would help employers and health plans counteract the effects of higher drug utilization and price inflation within major medical plans. Medco’s medical benefit management program would “oversee medical policy development, formulary management, prior authorization and coverage rule management, claims management including NDC-based pricing, and rebate management for clients,” according to a press release announcing the plan.

Medco maintains that they are the first business to create this breed of cost-management program for specialty drugs. “Historically, health insurers and other payers have not focused on the prevention of waste or the management of specialty drugs that fall within the medical benefit,” noted Frank Sheehy, president of Medco subsidiary Accredo Health Group, Inc. “We developed this program in order to extend the best practices in specialty pharmacy to major medical coverage.”

Ben Slen, director, product development, Accredo Health Group, Inc, noted that a specialty pharmacy tracks dosage information, whereas a major medical benefit may not monitor this exact number as closely. He told Formulary, “Hemophilia patients get clotting factor prescribed to them in specific doses. The specialty pharmacy will dispense the drugs in vials that are very close to the prescribed amount rather than wasting a half a vial of a medication that might cost $1000 or more per dose. A major medical plan may not notice the difference, but the specialty pharmacy tracks this sort of thing to prevent the waste. Now, through this program, the major medical can track and manage use.”

The proposed launch of this program comes on the heels of Medco’s announced merger with Express Scripts Inc, a move that has proved controversial. The merger would create the largest PBM in the country, and the proposed union is currently under review by antitrust regulators. Community pharmacists have argued that the merger will affect their businesses.

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