medco health stock

Medco Health Solutions (NYSE: MHS) is one of the nation's biggest pharmacy benefit managers (PBMs). Medco provides services through a network of retail pharmacies and its own mail-order pharmacy. Pharmacy benefit managers like Medco generate profits by consolidating buyers to obtain discounts with pharmaceutical manufacturers, distributors, and retail pharmacies, and work with clients to design customized pharmacy benefit plans. By acquiring Accredo in 2005, Medco became one of the largest providers of specialty pharmacy services in the United States as well.Medco provides clinically-driven pharmacy services designed to improve the quality of care and lower total healthcare costs for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by Medicare Part D Prescription Drug Plans. During the fiscal year ended December 26, 2009, the Company administered 695 million prescriptions.Company OverviewMedco is one of the national Prescription Drug Plans (PDP) named by the Centers for Medicare and Medicaid Services to administer prescription drug plan benefits for the Medicare-eligible population at large.Medco's revenue comes primarily from contracting with clients to provide prescription drugs to their members through mail order and Medco's retail network. The PBM client will pay for the drugs dispensed to their members at a discount to average wholesale price plus a dispensing fee. Some clients may also pay center administrative fees attached to services. Increasing these fees is part of the way Medco has been able to increase its rebates to customers.Contents1 Company Overview1.1 Business and Financial Metrics1.2 Business Segments1.2.1 Plant Design[2]1.2.2 Clinical Management[2]1.2.3 Clinical Services, Specialty Pharmacy[2]1.2.4 Pharmacy Management[2]1.2.5 Physician Services[2]1.2.6 Internet-based Services[2]1.3 Partnerships and Acquisitions[3]2 Trends and Forces2.1 Benefits from expiring patents2.2 Biotechnology and specialty pharmacy growth2.3 Market Consolidation and Walmart's $4 Prescriptions2.4 Demand for greater transparency, more rebates2.5 Baby boomers, other trends outpace inflation3 Competition4 ReferencesBusiness and Financial MetricsSecond Quarter 2010 Results[1]During the second quarter of 2010, Medco reported GAAP diluted earnings per share (EPS) increased 20.3 percent to a record $0.77 from $0.64. Diluted EPS, excluding $0.06 in amortization of intangible assets from the 2003 spin-off, increased 20.3 percent to a record $0.83 from $0.69 in the second quarter of 2009. Total net revenues increased 9.9 percent to a record $16.4 billion. Specialty pharmacy revenues increased 18.1 percent to a record $2.8 billion. Mail-order prescriptions increased 6.2 percent to a record 27.5 million. Generic dispensing rate increased 3.3 percentage points to a record 70.6 percentBusiness SegmentsPlant Design[2]Medco’s client teams take a consultative approach to assisting clients in the development and implementation of plan design, which suit their specific needs. The clients have access to the skills of various Medco professionals, including experienced clinical, financial and information technology specialists. As an integral part of the consultative approach, the account teams use the software tools developed to model the effects of different plan designs based on historical data, including Medco’s EXPERxT Advisor, which provides real-time plan design modeling capability for the clients. Clients can use these models to judge the impact of specific plan design elements before they are implemented.Clinical Management[2]The Company offer coverage management and utilization management programs, including drug utilization review, which is a systematic evaluation of individual and population use of prescription drugs, to identify and address over-use, under-use, and misuse of prescription drugs. It has also introduced a portfolio of clinical solutions. RationalMed service, an advanced patient safety program designed to improve patient care and lower total healthcare costs. It analyzes patients’ available prescriptions, inpatient and outpatient medical and laboratory claim records to detect gaps and errors in care, and then engages physicians, pharmacists and patients in making appropriate changes. Medco offer RationalMed as a program to health plans and plan sponsors.For Medicare Part D plans, Medco offers Medication Therapy Management program, designed to ensure that covered Medicare Part D medications prescribed to focused beneficiaries are appropriately utilized to optimize therapeutic outcomes. Medco uses the Chronic Disease Score, a software algorithm to identify the beneficiaries who meet the criteria established by Centers for Medicare & Medicaid Services (CMS).

Labels: