Medco: Number of Consumer-Directed Health Plan (CDHP) Clients Surged in 2006; Projected to Double by 2007

FRANKLIN LAKES, N.J., April 11 /PRNewswire-FirstCall/ -- The number of consumer-directed health plans (CDHP) has the potential to double by 2007, and an increasing number of plan sponsors are leveraging pharmacy benefit and decision-support tools to drive consumerism, according to CDH experts with Medco Health Solutions, Inc. .

According to Medco, the number of consumer-directed health clients integrating pharmacy and medical benefits across benefit administrators increased more than tenfold, from 3 to 50, between January 2005 and January 2006; and the number of client members enrolled in an HRA- or HSA-based CDH plan topped 2 million -- representing over one-third of the US CDH market. Medco projects the number of plan sponsors leveraging the pharmacy benefit in their consumer-directed health plans could reach 100 within the next 12 months.

This growth is being fueled by the recent expiration of the IRS Transition Relief for HSAs. It is now required that the prescription drug benefit, along with the medical benefit, is part of the high deductible health plan (HDHP). "A misconception among CDHP sponsors is a perceived lack of integration and connectivity between the medical and pharmacy sides of the benefit," said Tracy Grunsfeld, senior director, consumer solutions, Medco. "The technology has advanced now to the point that we can provide real-time integrated data exchange between the medical and pharmacy benefits. This gives our clients the best of both worlds -- a seamlessly integrated health benefit for the consumer with a continued and dedicated focus on pharmacy benefits."

According to Medco data, 50 percent of all healthcare transactions are pharmacy-related. Therefore, pharmacy provides the greatest opportunity to drive consumerism. A well-managed pharmacy benefit is critical to a plan sponsors' consumer engagement strategy, and requires strong connectivity between medical and pharmacy providers to properly manage an integrated benefit. Medco is currently connected to more than 25 of the nation's leading carriers and third-party administrators, representing an estimated 80 percent of the consumer-directed health market.

"Consumer-directed health plan options are not for everyone -- however, for employers looking to offer a CDH option to their plan members, we provide a turn-key business solution," said Grunsfeld.

Medco -- Expertise and Experience in CDH

Medco took a leadership role in the consumer-directed health market in 1999 as the PBM of choice for CDH innovators. In 2000, Medco launched the first bi-directional medical and pharmacy data integration system to allow medical and pharmacy benefit providers to exchange consumer-directed health data.

In 2002, the company launched real-time data transmission capabilities with several leading CDH debit card administrators to provide real-time access to health savings and flexible spending accounts. Flexible spending accounts provide another powerful means to drive a consumer-driven health plan.

"As much as plan design and connectivity are integral to a seamless CDHP strategy, consumerism is a more critical factor to fully realizing the benefits of a consumer-directed plan," says Grunsfeld. To that end, Medco continues to focus on providing consumer engagement tools, such as web-based drug cost comparison and account and deductible balance management tools, to ensure consumers can optimize their pharmacy benefit.

About Medco

Medco Health Solutions, Inc. is a leader in managing prescription drug benefit programs that are designed to drive down the cost of pharmacy health care for private and public employers, health plans, labor unions and government agencies of all sizes, and for individuals served by the Medicare Part D Prescription Drug Program. Medco's technologically advanced mail-order pharmacies and award-winning Internet pharmacy have been recognized for setting new industry benchmarks for pharmacy dispensing quality. Medco serves the needs of patients with complex conditions requiring sophisticated treatment through its specialty pharmacy operation, which became the nation's largest with the 2005 acquisition of Accredo Health, Incorporated. Medco is the highest-ranked pharmacy benefit manager on the 2006 Fortune 500 list, reporting revenues of nearly $38 billion in 2005. On the Net: http://www.medco.com/.

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward- looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.