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Medicare Compliance & Reimbursement

PHARMACEUTICALS:

Medco Says It Will Apply To Be A Nationwide PDP

Published on Tue Jan 25, 2005

No word on how much risk PBM is willing to shoulder

Presenting a valentine to the Bush administration, Medco Health Systems said Feb. 14 that it would offer prescription drug coverage to Medicare beneficiaries across the country.

The announcement represents a step on a long journey for the company. When House Ways and Means chair Bill Thomas (R-CA) and others first began pushing several years ago to deliver a Medicare drug benefit through private channels, many experts predicted that fears of "adverse selection" (i.e., that only beneficiaries who spend a great deal on drugs would participate) would prevent any private company from offering a stand-alone PDP.

Thomas' response was to circulate a letter from Medco saying it envisioned participating.

Health and Human Services Secretary Mike Leavitt cited Medco's announcement as evidence that there would be a "robust and competitive market" of PDPs and MA plans "in every region in the country." He said that Medco's presence would eliminate the need for any non-risk bearing fallback plans, said Leavitt.
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