DRUG MANAGEMENT: Rising Costs Buoy New Company
With drug prices on a steady rise and consumers demanding more and costlier pharmaceuticals, many HMOs are looking to pharmacy management companies for help. The Sacramento Bee reports that Pharmaceutical Care Network, a Sacramento-based drug management firm, "has carved out a profitable niche in the world of managed health care," as HMO "drug expenditures have increased up to 15% over last year" and may "spike higher still next year." John Sakal, president and CEO of PCN, said, "I think you'll continue to see drug costs continue to go up. With the graying of the population, you will see more and more usage of drugs." PCN helps HMOs curb their drug costs by "maintaining a nationwide network of pharmacies that offer discounted drugs, arranging for rebates from drugmakers, tracking drug usage, processing prescription claims and helping develop drug formularies." PCN has produced a software program, MedIntelligence, that lets "users track drug use or point out areas where they can cut back on expenditures."
A Much Needed Service
The Bee notes that PCN clients "usually lack the resources to keep up with the vast amount of data on different drugs' prices, effectiveness and approval." Don Hufford, CMO for Sacramento-based Western Health, said PCN helps his company by performing "research on topics that the (HMO's) pharmaceutical committee wants help on." He added, "They have tremendous access to information on new drugs as they are approved by the FDA. That helps Western Health decide whether to add it to the preferred drug list." PCN's "services cover about 1.5 million people," mostly HMO enrollees in the western U.S. And PCN leaders "want to add another 4 million people" in the next four years. "Because prescription drugs are going up ... it makes sense for companies to look to pharmaceutical benefit managers," said Catherine Kunkle, vice president of the National Business Coalition on Health (Young, 5/3).