New management of state employee pharmacy benefits could save $120 million

[FEB. 10, 2005]  CHICAGO -- The Illinois Department of Central Management Services announced Wednesday plans to ensure 230,000 of the state's dependents and retirees have access to affordable, convenient and high-quality prescription medications, while saving the state more than $120 million. Central Management Services intends to award a $38.75 million contract to Medco Health Solutions to manage approximately $2 billion in pharmacy benefits claims over the next five years.

New Jersey-based Medco Health Solutions Inc., a leading pharmacy benefits manager with the nation's largest mail-order pharmacy operations, will begin serving state employees July 1. The new contract will offer the state more than $120 million in savings over its five-year term.

"CMS has completed the selection process and chosen a new vendor for pharmacy benefits," said Michael Rumman, director of Central Management Services. "This new contract will be one of the most progressive pharmacy benefits contracts in the country. Medco has agreed to disclose all sources of revenue it receives from having the state's business and pass through to us any rebates and manufacturer incentives it receives in managing our employee program. In return, the state will pay an administrative fee. The contract is transparent."

For employees and retirees, the current options of choosing Medco's mail-order service or visiting a participating retail pharmacy to receive their maintenance prescriptions remain the same.

In the coming months, employees and retirees will receive information regarding Medco's program.

The 10 vendors that also submitted bids have seven working days to protest the state's decision. If no protests are filed, Central Management Services will promptly execute a contract with Medco and file it with the comptroller before the July 1 effective date.

About Central Management Services

The Illinois Department of Central Management Services manages the business of state government. The department leads the cost-effective administration of real estate, purchasing, information, internal audit and outside legal services for the state's executive agencies and directs the state's employee and vendor diversity programs.

[Illinois Department of Central Management Services news release]