CAREMARK AND BLUE CROSS OF IDAHO FORMING NEW PRESCRIPTION BENEFIT MANAGEMENT COMPANY
prescription drug services
NORTHBROOK, Ill., July 31 /PRNewswire/ -- Caremark International and Blue Cross of Idaho today announced plans to create a joint venture prescription benefit management (PBM) company. This joint venture will break new ground in the PBM industry as the first long term partnership of its kind between an existing PBM and a payor.
The new for-profit company, which will be majority-owned by Boise- based Blue Cross, is expected to begin management of prescription drug coverage for Blue Cross of Idaho customers and employees beginning September 1, 1995, once final contract details and closing provisions are completed. In addition, the company will market Caremark's full range of prescription management services to prospective customers throughout Blue Cross of Idaho's market area. These services include retail distribution networks, drug claims processing, formulary management, clinical drug programs, disease management and mail service programs.
Annualized sales for the new company, which will initially serve approximately 282,000 HMO and indemnity customers, are estimated to be between $25 million and $30 million.
"Creating our own PBM through this joint venture with Caremark will provide our customers enhanced pharmacy benefits through a cost effective structure," said Tracy Andrus, vice president of Public Affairs and Corporate Communications for Blue Cross of Idaho. "Caremark brings a recognized expertise in pharmacy benefits management and a full line of prescription management services that will result in a positive return for our Blue Cross of Idaho customers."
Blue Cross of Idaho also pointed to Caremark's pharmaceutical independence as a positive. "Caremark's independence from pharmaceutical company ownership was an important factor in our search for the right business partner," explained Andrus. "Our western logic is skeptical of arrangements where the fox is guarding the hen house."
According to Larry Taylor, vice president and general manager of Caremark's Managed Pharmacy Resources Division, Caremark's PBM joint venture model offers greater benefits to both partners than those achieved by payors through traditional fee-for-service arrangements with multiple PBM vendors. "Our joint venture with Blue Cross of Idaho creates a complete PBM company offering high quality, state-of-the-art services that will generate incremental revenue and create long term value for both companies," Taylor said. "The capabilities and experience Caremark brings to the new PBM company will provide Blue Cross with an immediate competitive advantage without having to build its own PBM from the ground up."
The partnership benefits Caremark by enabling the company to quickly penetrate previously unaddressed markets, expand beyond its current base of 29 million lives, and generate revenue through sales of additional PBM services to Blue Cross of Idaho customers. Caremark has provided retail pharmacy claims processing services to Blue Cross since July 1993. Under terms of the joint venture agreement, Caremark would also obtain access to medical and prescription drug patient data that will facilitate the company's outcomes research initiatives and ongoing development of disease management programs.
Blue Cross of Idaho Health Service, Inc. is Idaho's largest health insurer, providing indemnity and managed care services to one out of four Idahoans through the state's largest contracted provider network. Blue Cross also operates Idaho's largest HMO and has been at the forefront in the development of community-based integrated delivery systems throughout the state. Blue Cross of Idaho, an independent licensee of the Blue Cross and Blue Shield Association, is headquartered in Idaho's capital city of Boise. Revenue for the non profit mutual insurer was $258.8 million in 1994.
Caremark International Inc. (NYSE: CK) is a leading provider of patient care services through health care networks specializing in managed care. These services include physician practice management, pharmaceutical services, disease management and international operations. Its pharmaceutical services operating unit develops innovative programs, services and strategies that leverage the value of prescription drugs to achieve quality, cost-effective health care. These programs include prescription benefit management, managed pharmacy programs, disease management programs and specialty pharmaceutical services. The company had 1994 sales of $1.9 billion from continuing operations.
/CONTACT: Les Jacobson of Caremark, 708-559-4695, or Tracy Andrus of Blue Cross of Idaho, 208-331-7380/
CO: Caremark International; Blue Cross of Idaho ST: Illinois, Idaho IN: INS MTC SU: JVN
DC -- NY088 -- 0053 07/31/95 14:48 EDT
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|Date:||Jul 31, 1995|
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