CVS Caremark, Express Scripts, Medco Health Solutions Join with U.S. Chain and Independent Pharmacies to Accelerate Transition
from Paper-Based to Paperless Prescribing
ALEXANDRIA, Va. and ST. PAUL, Minn. - July 1, 2008 - In the single most significant advance to the accuracy, efficiency and quality of information associated with the 4 billion prescriptions written annually in the United States, the nation's retail pharmacies and leading pharmacy benefit managers (PBMs) today announced an unprecedented collaboration to unite the country's two leading
health information networks.
The groups have merged two organizations: RxHub, founded in 2001 by the nation's three largest PBMs - CVS Caremark Corporation, Express Scripts, Inc. and Medco Health Solutions, Inc.; and Surescripts, also formed in 2001 by the National
Association of Chain Drug Stores (NACDS) and the National Community Pharmacists Association (NCPA). The organizations will consolidate their operations, forming a single, secure, nationwide network for e-prescriptions and the exchange of health
RxHub's expertise in patient identification and delivering drug benefit information to the physician at the point of care complements Surescripts' focus on electronic prescription routing from the physician's office to the pharmacy. The merger combines these strengths with a shared focus on more access to patient medication history to form a single suite of comprehensive services. The new organization will enable physicians to securely access vital health information when caring for their patients through a fast and efficient health information exchange. This will allow them to transmit electronic prescriptions and renewal requests to both retail
and mail-order pharmacies.
In 2008, the combined organization expects to transmit 100 million electronic prescription transactions and respond to more than 70 million requests by physicians confirming information about their patients' drug coverages and medication histories. With appropriate patient consent, the combined organization will extend this information to clinicians caring for more than 200 million
patients across the United States.
Easy, Efficient, Accurate, Safe and Secure
With this information more readily available, the process of prescribing medications is measurably improved by:
providing physicians with added knowledge of their patients;
enabling a more informed choice of therapy;
ensuring that the medicine intended by the physician is actually and accurately communicated to the pharmacy;
allowing patients to weigh important economic considerations within a range of appropriate clinical options before a prescription is written;
and adding convenience to the overall process.
"I can think of 4 billion reasons this merger makes sense," said John Driscoll, president, New Markets, Medco Health Solutions, Inc. "Prescribing medications for patients is one of the most fundamental acts in healthcare. If we, as an industry and as a nation, are serious about improving the quality of care and making it more cost-effective, then immediate and sweeping measures are required. This merger sets aside historic economic and political differences to do what is necessary to advance paperless prescribing and the secure exchange of critical information between providers - instantly elevating the quality of care."
"This merger represents a collaboration between industries that are equally committed to improving healthcare," said Bruce Roberts, executive vice president and CEO, NCPA. "The combined strengths of the two organizations will enable the delivery of a single suite of services that will dramatically improve the safety, efficiency and quality of one of the largest segments in healthcare. We remain committed to maintaining the guiding principles that have driven the success of Surescripts and RxHub to date. We will continue to protect patient choice of pharmacy and physician choice of therapy."
Today, there are hundreds of technology vendors developing electronic medical records - as well as other clinical software that includes e-prescribing functionality - used by physician practices across the United States. For these vendors, the merger of RxHub and Surescripts will offer a single, unified process for testing and certifying their products' connection to a single network
and the services it provides. Streamlining these processes will save the industry time and money and will offer physicians more of the information they need to provide quality care to their patients.
The new organization will remain committed to proactively supporting the standards that have been defined for electronic prescribing and health information exchange and will continue to collaborate with leading standards and accrediting organizations.
The boards of directors of both organizations approved the cashless merger of equals. Surescripts' owners (NACDS and NCPA) will retain 50 percent ownership as will RxHub's owners (CVS Caremark, Express Scripts and Medco Health Solutions). The new organization will remain privately owned and continue to operate under a cost-recovery model as a low-cost health information utility.
Initially, the new organization will be jointly managed by the acting CEO of RxHub, J.P. Little, and the acting CEO of Surescripts, Rick Ratliff. The new board has begun a process to select a CEO and has retained Spencer Stuart to conduct a nationwide search. Driscoll and Roberts will serve as co-chairmen of the board of directors through 2009. The co-chairmen will rotate on an annual basis to include one co-chair representing PBMs and the other representing retail pharmacies. The new six-member board includes a single director each from CVS Caremark, Express Scripts, Medco Health Solutions, NACDS and NCPA. The sixth member of the board is designated by NACDS and NCPA. The combined company will have more than 75 employees and will maintain its existing office locations in St. Paul and Alexandria.
The new organization is undertaking a rebranding initiative. In the interim, the company will be referred to as Surescripts-RxHub. For more information regarding this merger, please visit www.SurescriptsRxHub.com.
E-Prescribing's Unprecedented Momentum
We expect this transaction to add momentum to the rapidly developing nationwide support for e-prescribing. Some recent developments include:
In December of 2007, U.S. Sen. John Kerry joined with former Speaker and founder of the Center for Health Transformation Newt Gingrich and a number of Senate colleagues to announce the introduction of the Medicare Electronic Medication and Safety Protection Act ("E-MEDS"). The E-MEDS bill proposes to offer physicians reimbursements for investing in e-prescribing technology as well as incentive payments each time a prescription is transmitted electronically and the claim is submitted through Medicare.
During that same week in December, U.S. Sen. Sheldon Whitehouse chaired a Senate Judiciary Committee hearing on the Drug Enforcement Administration's policy prohibiting e-prescribing of controlled substances. This policy requires physician practices to maintain two separate processes for prescribing: one that is paper-based for controlled substances and another that is electronically based for all other medications. In the view of many physicians and pharmacists, the administrative burden of maintaining two separate processes is a significant barrier to adoption and use of e-prescribing. If the DEA were to permit
e-prescribing of controlled substances, it would represent another potential boost to e-prescribing adoption and use.
Beginning on March 4, 2008, the American Academy of Family Physicians (AAFP), the American Academy of Pediatrics (AAP), the American Academy of Nurse Practitioners, the American Academy of Physician Assistants, the American College of Cardiology (ACC), the American College of Obstetricians and Gynecologists (ACOG), the American Osteopathic Association (AOA) and the Medical Group Management Association (MGMA) took the unprecedented action of not only announcing their support for e-prescribing, but also launching a nationwide program and an online portal - www.GetRxConnected.com - where physicians can follow a step-by-step process designed to help them transition from paper-based prescribing to e-prescribing.
GetRxConnected.com was created under the auspices of The Center for Improving Medication Management (founded by the AAFP, Humana Inc., Intel Corporation, the MGMA and Surescripts).
On April 2, 2008, the Centers for Medicare and Medicaid Services issued final standards for e-prescribing under the Part D Medicare drug program.
As of April 14, 2008, the following organizations have formally voiced support for e-prescribing: AARP; AFL-CIO; American Federation of State, County, and Municipal Employees; Center for Medical Consumers; Childbirth Connection; Consumers Union; Health Care For All; National Consumers League; National Family Caregivers Association; National Partnership for Women & Families; and SEIU.
On June 27, 2008, the DEA proposed regulations that would provide physicians and other authorized prescribers with the option of issuing electronic prescriptions for controlled substances. These regulations would also permit pharmacies to receive, dispense, and archive these electronic prescriptions. The agency is seeking public comment on the proposed regulations through September 25, 2008.
The timing of today's merger is, therefore, no coincidence. It reflects the view by all board members that the merger will combine with recent events to greatly accelerate the nation's move toward paperless prescribing and the secure, electronic exchange of health information.