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CalPERS awards Rx contract to CVS Caremark
June 23rd, 2011
SACRAMENTO, Calif. – The California Public Employees' Retirement System (CalPERS), one of the nation's largest pension funds, has chosen CVS Caremark Corp. to administer prescription drug benefits for members of its preferred provider organization (PPO) health plans.
CalPERS said this week that the three-year pact represents about $565 million in annual drug spending. It goes into effect on Jan. 1, 2012, and carries an option of two one-year extensions.
According to the pension fund, CVS Caremark will succeed Medco Health Solutions, which has been the PPO pharmacy benefits manager since July 1, 2006, under a contract that ends Dec. 31, 2011. Caremark had previously provided PBM services for CalPERS' PPO program, from Jan. 1, 2003, through 2005.
For CVS Caremark, the pharmacy benefits management contract marks the second big deal it has landed in recent weeks. In late May, the company announced that it was picked to provide PBM services for the Blue Cross and Blue Shield Governmentwide Service Benefit Plan, also known as the Federal Employee Program (FEP). CVS Caremark reportedly edged out Medco to win the $3 billion federal contract.
"We are confident that Caremark will meet the needs of our members. Our team is working with CVS Caremark and Medco to make sure that the transition for our members and physicians will be as smooth as possible," Ann Boynton, deputy executive officer for CalPERS benefit programs policy and planning, said in a statement. "We are committed to the health and safety of our members, and we have included a number of measures in our contract with Caremark to improve transparency and protect our members."
Specifically, CVS Caremark will administer prescription drug benefits for more than 346,000 members of CalPERS' self-funded PERS Select, PERS Choice and PERSCare PPO plans.
CalPERS noted that CVS Caremark will offer some new benefits, including its Maintenance Choice Program that enables members to pick up a 90-day supply of medication at a CVS pharmacy; its Gaps in Care Plus Medical Program, which uses an integrated medico-pharmaceutical approach to identify potential gaps and omissions in drug and medical therapy; and the opportunity to save money by choosing "best choice" medications (generics and preferred brands) and 90-day supplies in the iBenefit personalized mailing program.
CalPERS is the largest purchaser of public employee health benefits in California and the second-largest public purchaser in the nation after the federal government. It spends about $7 billion a year on health care for active and retired state and local government employees, retirees and their family members.