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Express Scripts And Medco Save Americans Tens Of Billions In Healthcare Costs, New Economic Report Shows

WASHINGTON, Dec. 5, 2011 /PRNewswire/ -- Pharmacy benefit managers Express Scripts and Medco save employers, the federal government, labor unions, and consumers between $51 billion and $87 billion annually on the cost of prescription medications, according to a new report released today by economists Jonathan Orszag and Kevin Green of Compass Lexecon



" Pharmacy benefit managers (PBMs) save consumers billions of dollars, but most people do not know very much about the role such firms play in the healthcare system," said Orszag, who served as an Economic Policy Adviser on President Clinton's National Economic Council. "We hope this study shows the economic benefits created by PBMs today, the role that PBMs should play in constraining rising healthcare costs in the future and the role the merger of Express Scripts and Medco can play in accelerating those savings."

A copy of the report can be found at this link:

The lower bound of the savings range is based on the Congressional Budget Office's findings that PBMs reduce drug costs by 30 percent.  The analysis concludes that savings are likely even higher when financial benefits derived from increased discounts provided by drug manufacturers and the extensive clinical offerings are considered. 

In addition to driving down costs of prescription medications by negotiating favorable drug prices from manufacturers and retail pharmacies, PBMs such as Express Scripts and Medco have created a fully wired pharmacy system to:
  • Increase the efficiency of prescription management.
  • Improve patient adherence to medications.
  • Detect and close gaps in care.
  • Use advanced systems to personalize pharmacy care for patients with chronic conditions and complex therapeutic needs. 

The study also estimates the savings PBMs achieve for specific groups of consumers of health services. It finds that Express Scripts and Medco save roughly $21.7 billion a year for the federal government and Medicare beneficiaries, as well as $61.9 billion every year for employers and individuals and $3.5 billion per year for labor unions.

Express Scripts and Medco announced earlier this year their intent to merge. The merger is expected to close in the first half of 2012, pending review by the Federal Trade Commission.

"With the cost of medications continually on the rise, our role as an advocate for patients has never been more necessary," said George Paz, chairman, president and CEO of Express Scripts. "Throughout our history we have stood beside our clients — the employers, government agencies, health plans and unions who provide the pharmacy benefit to American families — in full alignment to drive out waste, lower costs and make medicines safer and more affordable. Bringing our companies together will enable us to bring forward innovative solutions to improve the quality of patient care and lower costs."

The report explains that PBMs play an increasingly important role as chronic and complex diseases become more prevalent. Patients with chronic and complex diseases — such as cardiovascular disease and diabetes — account for an estimated 96 percent of drug spending and 75 percent of total healthcare expenditures. Innovative measures implemented by PBMs, such as predictive models to identify non-adherence and personalized medicine through pharmacogenomics, in addition to driving higher use of generics and dispensing prescriptions via lower cost channels are helping to address this challenge. Given that most patients are prescribed medications as a first line of defense, PBMs' success in containing drug spending while better managing the total costs of care for those with chronic conditions is a key to solving our nation's healthcare cost problems.

"We are particularly proud of the advanced clinical care standard we have developed specifically to address the needs of patients with chronic and complex conditions. In 2010 alone, we closed more than 2.3 million clinical gaps in care with an estimated $900 million in savings from reducing hospitalizations, avoiding ER visits, and lowering other medical expenses, and we've only scratched the surface," said David B. Snow, Jr., CEO of Medco. "By combining the best of Medco's expertise in advanced clinical pharmacy with the best of Express Scripts' expertise in behavioral science, as illustrated in this economic study, we will create a company that will pioneer advances in closing gaps in care, saving dollars and saving lives."

Express Scripts Media Contact Brian Henry (314) 684-6438 

Express Scripts Investor Contact David Myers(314) 810-3115   

Medco Health Solutions Media Contact Lowell Weiner(201) 269-6986

Medco Health Solutions Investor Contact  Valerie Haertel(201) 269-5781

For more information and for a copy of the full report visit:  

About Express Scripts

Express Scripts, Inc. (Nasdaq: ESRX), one of the largest pharmacy benefit management companies in North America, is leading the way toward creating better health and value for patients through Consumerology®, the advanced application of the behavioral sciences to healthcare. This approach is helping millions of members realize greater healthcare outcomes and lowering cost by assisting in influencing their behavior. 

Headquartered in St. Louis, Express Scripts provides integrated PBM services including network-pharmacy claims processing, home delivery services, specialty benefit management, benefit-design consultation, drug-utilization review, formulary management, and medical and drug data analysis services. The company also distributes a full range of biopharmaceutical products and provides extensive cost-management and patient-care services. More information can be found at

About Medco Health Solutions Medco Health Solutions (NYSE: MHS) is pioneering the world's most advanced pharmacy® and its clinical research and innovations are part of Medco making medicine smarter™ for more than 65 million members.

With more than 20,000 employees dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2010 revenues of $66 billion, Medco ranks 34th on the Fortune 500 list and is named among the world's most innovative, most admired and most trustworthy companies. 

For more information, go to


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This material may include forward-looking statements, both with respect to us and our industry, that reflect our current views with respect to future events and financial performance. Statements that include the words "expect," "intend," "plan," "believe," "project," "anticipate," "will," "may," "would" and similar statements of a future or forward-looking nature may be used to identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond our control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements. We believe that these factors include, but are not limited to, the following:

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