Medco Rethinks Part D: Bailing Out or Mailing it In?
This article was originally published in RPM Report
Medco shed over 100,000 Part D members in 2007 and the company couldn't be happier. Medco says it has no interest in serving the poorest Medicare beneficiaries, because they do not use mail order and can't be given viable economic incentives to do so. If other plans start to think like Medco, Part D advocates may have reasons to worry.
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United, Humana and especially WellCare are taking their licks in the run-up to the third year of the Medicare prescription drug program. That is just the latest warning sign for pharma and biotech companies that a critical market is entering a critical turning point.
The merger of MemberHealth into Universal American is the biggest Part D deal so far-and the first of what is sure to be many ripple effects from the CVS/Caremark agreement. Universal's model relies on cross-selling in Medicare Advantage. The era of the stand-alone drug plan may be ending.
Medicare beneficiaries stuck with their Part D plans heading into 2007. That gives insurers more leverage in price negotiations with big pharma. It also means Part D may be more likely to stick around despite critics in the Democratic Congress.