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CIGNA HEALTHCARE STRENGTHENS MANAGED HEALTH CARE CAPABILITIES; PURCHASES TEL-DRUG, A MANAGED PHARMACY COMPANY

 BLOOMFIELD, Conn., Oct. 4 /PRNewswire/ -- CIGNA HealthCare, the largest investor-owned operator of health maintenance organizations in the United States, announced today that the CIGNA Companies have purchased, for an undisclosed price, Tel-Drug, a Sioux Falls, S.D.-based mail-order pharmaceutical company. Tel-Drug will become a part of the product portfolio of RxPRIME, CIGNA's managed pharmacy benefit program, which was formed last year.
 "The purchase of Tel-Drug is a strategic investment for us," said Lawrence P. English, president of CIGNA HealthCare. "We currently operate one of the nation's largest and most sophisticated IPA (Individual Practice Association) HMO pharmacy programs, serving more than 1.5 million people. RxPRIME is an extension of that managed pharmacy program, utilizing the same industry relationships, advanced management techniques, pharmacy infrastructure and depth of expertise. The addition of Tel-Drug expands our service base into another rapidly growing area of managed health care, which will play a key role in any model of health care reform, and provides employers with the convenience of using one-stop shopping for their pharmacy programs."
 Marjorie G. O'Malley, president of RxPRIME, added: "As employers have become more sophisticated in pursuing methods to control the growth of sky-rocketing health care costs, they have begun to focus on drug expenditures, which can account for as much as 10 percent of an employer's total health care costs for active employees and up to 50 percent for retirees. As a result, the mail-order pharmacy business has grown substantially over the past five years.
 "Pharmacy benefit management, including mail-order, has demonstrated the potential to substantially reduce employers' pharmaceutical costs, while providing high quality care and customer satisfaction," O'Malley noted.
 Steve Statz, president of Tel-Drug, said the acquisition of his company by CIGNA will benefit both companies as well as the economy of Sioux Falls. "We're extremely excited about joining CIGNA. It will enable us to grow and be more competitive than we could ever be as an independent company," said Statz, noting that CIGNA's intent is to keep Tel-Drug's operations in South Dakota. "Tel-Drug has substantial capacity for expansion, which will be required in the near term as we offer this service through both CIGNA's HMO and other managed pharmacy programs."
 The American Managed Care Pharmacy Association currently estimates that investor-owned mail-order pharmaceutical sales will increase 33 percent, to $4 billion, in 1993. It is expected that growth will continue in a range of 30 percent to 40 percent for several years as drugs will be used to replace more expensive therapies, provide treatment for previously untreatable conditions and meet the medical requirements of an aging population.
 "Mail-order programs can supply more than half of the prescriptions for older populations with higher maintenance drug usage," said O'Malley, who noted that the over-65 age group accounts for one-third of all prescription drugs in the United States, although it represents less than 15 percent of the population. This segment of the population will continue to grow, however, as our population ages.
 CIGNA HealthCare is a division of the CIGNA Companies, a leading provider of insurance, retirement benefits, investment management, health care and financial services to businesses and individuals worldwide. Tel-Drug, a 10-year-old operation of the Statz Companies, Inc., a privately held holding company, has more than 175 funded benefit accounts.
 -0- 10/4/93
 /CONTACT: Wendell Potter, 203-726-4450, or Judith Knight, 203-726-1515, both of CIGNA HealthCare/


CO: CIGNA HealthCare ST: Connecticut IN: HEA SU:

MP-PS -- NY032 -- 8248 10/04/93 10:15 EDT
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Publication:PR Newswire
Date:Oct 4, 1993
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