CompCare Launches Pharmacy Savings Program Nationwide: First Revenues Expected By the End of the First Quarter
The crisis in U.S. health care expenditures reveals an unsustainable path with expenditures reaching $2.7 trillion in 2011 and expected to reach $4.6 trillion by 2020. And prescription-drug costs are increasingly playing a major role in contributing to this crisis as costs continue escalating at more than twice the rate of inflation and at a rate significantly higher than other health care costs.
According to a June 1, 2012 report published by the University of Missouri-St. Louis, the consequences for U.S. businesses of this emerging trend is that “…each 1% increase in private insurance drug expenditures is the equivalent opportunity cost of 20,000 jobs.” Reigning in health plan prescription-drug costs is a necessary condition to conducting business and maintaining a healthy and productive workforce in the U.S.
Pharmacy benefit managers can perform a critical function in reducing health plan prescription-drug costs without compromising the quality of prescription-drug delivery and patient care while improving health outcomes.
Comprehensive Care’s (CHCR – $0.13) management team recognized this emerging trend and quickly acted upon it. Over the last two years, Comprehensive Care (CompCare) constructed its Pharmacy Savings Program, or Pharmacy Value Management (PVM) Program as it’s called by CompCare, to actually save clients 10% or more on their annual pharmacy spend by providing them with a pharmacy management price that is 10% less than their prior year’s spend – fully secured by a performance bond.
The Company recently signed an agreement with one of the nation’s leading pharmacy benefit managers (“PBM”), which completes the structure needed by CompCare to initiate the national launch of its Pharmacy Savings Program. Thanks to this deal, CompCare has renegotiated pharmacy rates with PBM’s that can now more effectively compete with the 70% of the total market controlled by the Big Three.
Sales Team in Place
To properly launch the Pharmacy Savings Program nationwide, the Company has assembled a top sales force with over 150 years of collective experience in sales and marketing expertise, with a primary focus on pharmacy.
The Company succeeded in putting together senior sales and marketing people each with an independent book of business and relationships under the guidance and leadership of Lt. Col. Ramon Martinez (USAF, Ret.), President of CompCare Pharmacy Solutions, Inc.
The team will focus on CompCare’s goals of becoming the first choice in pharmacy management, wellness and behavioral health for unions and their families, municipalities, health maintenance organizations, self-insured and private sector groups.
In March of this year, Comprehensive Care signed its initial Pharmacy Savings Management agreement with the Blasters, Drillers & Miners Union, Local No. 29 of the Laborers’ International Union of North America (LIUNA). Based on a detailed analysis of Local 29’s previous year’s pharmacy spend, CompCare has guaranteed Local 29 a minimum of a 10% savings, backed up by a surety performance bond.
And in May of this year, CompCare announced the signing of a Pharmacy Savings Management agreement with Utica City School District. The agreement provides for CompCare to make its PVM Program available to Utica City School District and guarantee them savings of at least 10% over their current pharmacy expense.
CompCare’s Pharmacy Savings Program is a game changer in the industry as it offers the identical service level as other providers, but at a guaranteed 10% less cost.
The Company is presently negotiating with various other union leaders and union locals. The reason why CompCare actively pursues unions is because unions can easily switch PBM’s. Although most private companies have long-term contracts, most unions only are subject to one-to-three month’s notice.
The recent signing of the PBM agreement enables CompCare to offer and deliver the program nationwide. With the program up and running, and a strong sales force in place, the Company expects to be able to sign more similar deals with unions and municipalities in the near future.
The U.S. pharmacy benefit market has an annual prescription-drug spend of approximately $325 billion. Capturing one third (1/3) of one percent (1%) of this market translates into $1 billion. Management believes that given the uniqueness of its program, the quality of its sales force and its ability to attract clients by guaranteeing its performance at substantial savings off their prior year’s drug spend, it will be able to penetrate a reasonable segment of the overall market within the next 24 months.
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