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SureScripts, RxHub to join forces

BY DSN STAFF

ALEXANDRIA, Va. and , ST. PAUL, Minn. —Relations between pharmacy benefit managers and retail pharmacies have not always conjured images of close cooperation and partnership. But in a breakthrough business deal that could propel the nationwide adoption of electronic prescribing, the nation’s retail pharmacies and leading PBMs have formalized a merger of the country’s two leading health information networks.

The deal, announced July 1, brings together SureScripts, the e-prescribing platform provider owned by the National Association of Chain Drug Stores and the National Community Pharmacists Association, and RxHub, which was created by the PBM industry and is jointly owned by CVS Caremark, Express Scripts and Medco Health Solutions. Both organizations were formed in 2001 to foster the adoption of e-prescribing by retail pharmacies, pharmacy networks, physicians and technology vendors.

The agreement marks a remarkable level of fence-mending between two organizations that have competed for electronic networking contracts over the last seven years. In a joint statement, both groups call the merger “the single most significant advance to the accuracy, efficiency and quality of information associated with the 4 billion prescriptions written annually in the United States.”

Under terms of the deal, the organizations will consolidate their operations, forming a single, secure, nationwide network for e-prescriptions and the exchange of health information. Initially, the new organization will be jointly managed by the acting chief executive officer of RxHub, J.P. Little, and the acting chief executive officer of SureScripts, Rick Ratliff. The new board has begun a process to select a chief executive officer and has retained Spencer Stuart to conduct a nationwide search.

The merger, said leaders of both companies, will streamline the adoption of e-prescribing for physicians and technology vendors, giving them a single network and a common link to the nation’s dispensing pharmacies. It will also be complementary, they said, combining the best capabilities of both firms: RxHub’s “expertise in patient identification and delivering drug benefit information to the physician at the point of care, and “SureScripts’ focus on electronic prescription routing from the physician’s office to the pharmacy.”

“The merger combines these strengths with a shared focus on more access to patient medication history to form a single suite of comprehensive services,” noted SureScripts and RxHub jointly.

In 2008, the combined organization expects to transmit 100 million electronic prescription transactions and respond to more than 70 million requests by physicians confirming information about their patients’ drug coverages and medication histories. Assuming patients give consent, the merged companies will extend this information to clinicians caring for more than 200 million patients across the United States, SureScripts and RxHub predicted.

In an interview with Drug Store News, Little and Ratliff expressed enthusiasm about the merger and its potential to rapidly accelerate the rollout of paperless prescribing. “We’ve been working on this a long time, bringing together the PBM and retail pharmacy industries. This is a merger of equals,” Little said, “and it’s in the best interests of accelerating the adoption of electronic prescribing and improving healthcare information technology.”

Added Ratliff, “It’s a giant step toward our objective of getting to a paperless prescribing system nationwide.

“The key for us is to make this as efficient and streamlined as possible” for physicians, technology vendors, PBMs and pharmacies, he said.

Under terms of the merger, both companies will assume 50 percent ownership in the new venture, which will be run as a limited liability corporation. Serving as co-chairmen of the six-member board of directors will be Bruce Roberts, executive vice president and chief executive officer of NCPA, and John Driscoll, president of new markets for Medco. The combined company, which for the time being will be called SureScripts-RxHub, will maintain offices in Alexandria and St. Paul.

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CVS Caremark to expand headquarters, add positions

BY Antoinette Alexander

WOONSOCKET, R.I. CVS Caremark has announced expansion plans for its headquarters over the next two years, a move that will help support the company’s continued growth and current hiring expectations of more than 200 new positions on its corporate campus.

The nature of the new jobs was not disclosed. In Rhode Island, the company currently employs 5,800 associates.

The plans are to build two new 150,000-square-foot office facilities in the Highland Corporate Park in Cumberland, R.I. The company has been based in Highland Corporate Park, which is jointly located in Cumberland and Woonsocket, since 1982. The company significantly expanded its customer support center facilities in 1988 and again in 2000.

“Our company was founded in Rhode Island more than 40 years ago and we feel fortunate to be able to continually reinvest in our home state,” stated Tom Ryan, chairman, president and chief executive officer. “As the largest company in Rhode Island we are looking to further expand our base of operations to support our continued growth and, as a result, increase our workforce over the next few years.”

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A&P announces fiscal Q1 improvements

BY Antoinette Alexander

MONTVALE, N.J. A&P, which operates 446 stores under such banners as A&P, Pathmark and Waldbaum’s, announced on Friday improved results for the first quarter as it nears the completion of the Pathmark integration.

“The first quarter of 2008 clearly demonstrates our continuing progression in operating improvement with the achievement of our fourth straight quarter of comparable store sales of over 3 percent,” stated Eric Claus, president and chief executive officer. “Further, Pathmark is already achieving positive results with comparable store sales climbing above 3 percent for the first time in many years. The company is also well underway with the completion of the Pathmark integration, as many of the planned milestones have been achieved. As of the end of the first quarter, our annualized run-rate of synergies is approximately $100 million.”

Sales for the quarter totaled $2.9 billion compared with $1.7 billion in the year-ago period. Same-store sales rose 3.2 percent, which excludes sales for Pathmark stores acquired in December 2007. Same-store sales for Pathmark, measured during the same period, rose 3.1 percent.

Net income from continuing operations was $3.8 million, with a net loss per diluted share of 48 cents after adjusting for non-operating income related to fair value adjustments. This compares with income of $61.4 million, or $1.45 per diluted share, in the year-ago period.

The company did not break out pharmacy sales results.

As previously reported by Drug Store News, the company announced during the quarter an integral step in its transformation—the conversion of the majority of SuperFresh stores in the Philadelphia market to the recently premiered Price Impact format under the Pathmark Sav-A-Center banner and a number of SuperFresh locations retaining the Fresh format with significant upgrades.

Also during the quarter, the supermarket chain completed the remodel of A&P Fresh in Holmdel, N.J., to the updated Fresh format and began remodeling additional stores. The company also premiered its Price Impact format in the Irvington and Edison Pathmark stores.

“The remainder of fiscal 2008 will be focused on progressing the company further toward operating profitability by: moving forward our operating and aggressive merchandising strategies; maintaining cost control and reduction disciplines throughout the business. Integral to our drive to profitability is the continued and ongoing execution of capital improvement projects all geared for maximum return, and particularly weighted to value propositions,” stated Claus.

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