Express Scripts, the Pentagon’s pharmacy benefit management company, has been awarded a contract worth up to $5.4 billion over eight years to continue providing pharmacy services for Tricare beneficiaries.
The Defense Department announced Friday it awarded the St. Louis-based company an initial $33.8 million for the first year of the contract, renewable yearly for up to seven years, to provide pharmacy services for active-duty troops, retirees and their family members who use Tricare.
Express Scripts has managed the contract since 2003, overseeing the military’s pharmacies at clinics and hospitals and providing prescription services through more than 50,000 retail stores and by mail.
“Express Scripts is proud to continue providing world-class service and specialized pharmacy care to our men and women in uniform, along with their dependents and also to military retirees,” Chairman and CEO George Paz said April 18 after the announcement.
One other company bid on the multi-billion-dollar contract, but Pentagon officials did not name the other bidder, citing procurement rules.
The pharmacy benefit manager is considered a key partner in the Pentagon’s goal to reduce health care spending by $17 billion to $22 billion over the next five years. The pharmaceutical operations directorate is expected to contribute $1.3 billion to that savings.
Under the new contract, Express Scripts will continue managing all aspects of Tricare pharmacy operations, including a program started earlier this year that requires Tricare beneficiaries age 65 and older to use mail order to fill long-term maintenance prescriptions.
Express Scripts officials say they are especially proud of their mail-order business, which filled 4.3 million Tricare prescriptions in fiscal 2012. An audit last year by the DoD inspector general found that prescriptions were nearly 100 percent free of clinical errors in the home delivery system while retail pharmacies had a 98.5 percent accuracy rate.
“The results showed [mail order] was more affordable ... it was safer and it maintained a high level of beneficiary satisfaction,” said Nancy Gilbride, vice president of Express Scripts’ federal pharmacy services division.
In other Tricare pharmacy news, Public Health Service Rear Adm. Thomas McGinnis, who has served as Tricare’s pharmacy chief since 2005, will retire Friday. During his nine-year tenure leading the Pentagon’s pharmacy operations, he expanded pharmacy options for Tricare beneficiaries, negotiated with retail pharmacies for lower prices on prescription drugs and initiated a program that allows Tricare beneficiaries to get certain vaccines at retail pharmacies.
He also is largely responsible for implementing Tricare’s mail-order prescription program and promoting its growth.