About MEDCO HEALTH SOLUTIONS OF SPOKANE, INC

Express Scripts Holding knows that its customers like their medicine delivered quickly. The company administers more than 1.4 billion prescription drug benefits of 85 million health plan members in the US and Canada. Members have access to a network of more than 69,000 retail pharmacies, as well as the company's own mail-order pharmacies. On behalf of its insurer clients, Express Scripts processes claims for prescriptions, designs drug benefit plans, and offers such services as specialty drug delivery, disease management programs, and consumer drug data analysis.

Operations

Express Scripts provides services in four areas: benefit choices, drug choices, pharmacy choices, and health choices. Its Health Decision Science method combines behavioral science, clinical specialization, and actionable data to help customers make the best choices. Additionally, the firm's Therapeutic Resource Center provides access to specialist pharmacies and nurses to fill in gaps in health care.

The company operates in two segments: PBM (pharmacy benefit management, which accounts for nearly all revenues) and Other Business Operations. The PBM segment covers an array of benefits services including personalized medicine, case coordination, specialized pharmacy care, home delivery, retail network pharmacy administration, benefit design consultation, and public exchange offerings such as Medicare and Medicaid. The Other Business Operations segment includes subsidiaries CuraScript Specialty Distribution (which distributes specialty medicines to treat rare and orphan diseases directly to providers and hospitals in the US) and United BioSource (scientific consulting services for pharmaceutical manufacturers).

The PBM acquires pharmaceuticals either directly from manufacturers or through wholesalers. Generics are typically acquired directly from the manufacturer.

Geographic Reach

Express Scripts has more than 90 owned or leased PBM facilities throughout the US and seven owned or leased PBM facilities in Canada. Of these, eight domestic facilities are processing pharmacies for home delivery operations and five are mail-order dispensing pharmacies. The company also has more than 35 specialty branch pharmacies and eight contact centers in the US.

The Other Business Operations segment owns or leases 15 locations throughout the US and five more locations in Canada and Europe.

Sales and Marketing

Express Scripts' clients include HMOs and other health insurers, self-insured businesses, managed care organizations, third-party administrators, employers, workers' compensation plans, government health programs, and union benefit plans throughout North America.The company's top two clients are Anthem (more than 15% of total revenues) and the Department of Defense (more than 10%). In all, Express Scripts serves some 3,000 customers.

Financial Performance

Express Scripts' revenues have remained fairly steady at around $100 billion for the past few years. In 2016 revenue fell 1% to $100.3 billion as network revenues and other PBM revenues dropped; this was partially offset by growth in home delivery and specialty revenues.

Net income has shown strong growth for the past five years. It rose 37% to $3.4 billion in 2016 as cost of revenues and selling, general, and administrative expenses declined. The company also set aside lower provisions for income taxes that year.

Cash flow from operations has held steady as of late; it rose 1% to $4.9 billion in 2016. A decline in accounts receivable and higher accrued expenses offset the sharp rise in net income.

Strategy

Express Scripts and the pharmacy benefit management (PBM) industry have grown rapidly in today's complex health care system. PBMs strive to save money for their customers by negotiating good deals for prescription drugs with networks of retail pharmacies (their primary source of revenue), as well as by encouraging the use of cheaper generic drugs and home-delivered medications. Express Scripts also saves clients' money by offering disease and medication management programs to help members avoid unnecessary medical expenses.

The PBM industry has also undergone rapid consolidation, a factor that has allowed Express Scripts to grow its profits exponentially in recent years. Although it hasn't been acquisitive as of late, Express Scripts historically expanded its PBM operations through smaller purchases. It has also grown through organic measures, such as the addition of new customer contracts, as well as the extension of existing contracts to add new services. The company has also been investing some $75 million in the improvement of two new data centers in Chicago and Piscataway, New Jersey.

To serve consumers who are either uninsured or pay high out-of-pocket costs, Express Scripts launched the Inside Rx partnership with pricing comparison service GoodRx in 2017. The program offers an average savings of 34% off of drugs' typical cash prices. Also that year, the company agreed to participate in group purchasing organization (GPO) Walgreens Boots Alliance Development (WBAD). That move should allow Express Scripts to reduce the prices of generic prescriptions for patients.

Specialty pharmacy subsidiary CuraScript, part of the Other Business Operations segment, is experiencing higher consumer demand. Through its primary operating unit, CuraScript Specialty Distribution (or CuraScript SD), the subsidiary provides home distribution of specialty prescriptions (primarily injectable biotech drugs that require special packaging and handling); the unit also delivers to doctors' offices and other health care providers.

In 2017 Express Scripts signed a new contract with its largest customer, insurance giant Anthem. The insurer brings in more than 15% of Express Scripts' total revenues. However, that contract expires in 2019 and Anthem plans to consider all potential providers (including Express Scripts) at that time.

Company Background

Express Scripts merged with rival Medco Health Solutions in 2012, creating the largest pharmacy benefits management (PBM) company in North America.

- Show Less + Show Full Description

MEDCO HEALTH SOLUTIONS OF SPOKANE, INC

23102 E Appleway Ave
Liberty Lake, WA 99019-9585
Phone: 1 (509) 928-8738
Fax: 1 (509) 926-0733

Stats

  • Employer Type: Public
  • National Field Support Supervisor: Tony Drake
  • Information Technology Manager, Technical Support and Services: Victor Marquez
  • Management Information Systems Manager: Stacy Niles
  • Employees: 350

Major Office Locations

  • Liberty Lake, WA