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Company pushes the envelope to get prescriptions in the mailbox

Medco Health Solutions' three facilities in Tampa are just part of a system that delivers billions of dollars' worth of drugs each year.

By KRIS HUNDLEY, Times Staff Writer
© St. Petersburg Times
published September 15, 2002

TAMPA -- Employees of Medco Health Solutions Inc. begin opening tens of thousands of pieces of mail at 3 a.m. each weekday in a complex on Hillsborough Avenue. These early risers are one link in a multibillion-dollar business that starts with a doctor's prescription and ends with a drug in a patient's mailbox.

Medco is one of the nation's biggest pharmacy benefits managers, middlemen who promise to deliver savings to insurers and employers on prescription drugs through volume buying. Though critics increasingly question PBMs' ability to deliver on this promise (see accompanying story), there is no question they deliver the drugs.

Last year, Medco, a division of drugmaker Merck & Co. Inc., handled 537-million prescriptions. Most of those were processed the old-fashioned way, with customers taking their prescriptions into a retail pharmacy and Medco administering the claim.

But a growing number of prescriptions processed by Medco, about 75-million last year, moved through the mail.

Starting with orders submitted on paper, by phone or via the Internet, PBMs vie to prove they can ship a prescription faster, more cheaply and more efficiently than their competitors.

Big bucks are at stake. Not only are PBMs battling for lucrative customers such as BlueCross BlueShield or General Motors, which generally pay PBMs administrative fees. PBMs also will likely handle any Medicare prescription benefit plan that may be approved by Congress. Then the current flood of mail-order deliveries could swell to a tsunami, as could the lucky PBMs' profits.

Medco, which earned $256-million last year on sales of $29-billion, thinks it is well-prepared to handle a surge of business from Medicare recipients, many of whom are on maintenance drugs easily handled through home delivery. The Franklin Lakes, N.J., company already moves more than twice as many drugs by mail as its two largest competitors combined.

"We'd be one of the few PBMs that could support Medicare," said Greg Hansen, vice president of Medco's customer service operations in Tampa.

One reason for Hansen's confidence is the sophisticated infrastructure Medco has developed to push pills fast. The company, which has about 15,000 employees, has seven processing centers, six customer call centers and five dispensing centers around the country.

Tampa is one of only two cities where Medco operates one of each type of facility. (Las Vegas is the other.) At Tampa's NetPark@Tampa Bay on Hillsborough Avenue, orders are processed. At the Hidden River office park, customer service reps handle patients' calls. And at Sabal Park, pills are put in the mail. Medco's total workforce in Tampa is about 1,800.

The NetPark location services several large customer accounts, including the drug program for federal employees. More than 900 workers spread over several shifts open an average of 120,000 pieces of mail each week. Another 85,000 prescriptions come into the center via phone, fax or Internet.

Paper is kept to a minimum; all incoming prescriptions are sorted, scanned and filed by 5 a.m. From that point on, every action is electronic.

In a wide-open room with endless rows of monitors, workers quietly enter information from the scanned prescription image into the databank. Clerks enter the personal information; white-jacketed pharmacists enter medical details. A sign in the corridor warns visitors the hushed area is a "quiet zone."

A proprietary software package then edits the data for problems, anything from a missing quantity on the prescription to an overdue bill on the patient's account. About 30 percent of orders need attention before they are filled; these get routed electronically to another rabbit warren of work stations.

This section of the NetPark facility is noisier, with pharmacists and technicians chasing down information through phone calls and faxes to thousands of doctors' offices around the country. Many of the calls are about relatively noncontroversial issues: clarifying the drug name due to poor handwriting or checking for possible interaction with another prescription on the patient's record.

But of the 11,500 calls made to physicians each week by workers at the NetPark office, about 43 percent have the potential to infuriate doctors and their patients. Those are the calls in which the Medco rep tells the doctor the drug prescribed is not on the approved list, or formulary, of the patient's insurer.

Physicians say Medco frequently tries to push its parent company's drugs in the place of those prescribed. According to public filings, Medco has guaranteed Merck drugs will achieve a certain market share or the PBM will pay penalties to the drugmaker.

Another cost-saving tactic used by Medco and many other PBMs is to recommend generics over a branded drug. In a recent filing, Medco boasted that within two weeks of a generic becoming available for the diabetes drug Glucophage, 91 percent of prescriptions for the brand had been switched to the lower-price generic.

But such aggressive drug switching -- for lower costs or greater market share -- angers physicians and patients, who argue that many drugs aren't as easily interchangeable as PBMs would have patients believe.

Dr. David Lubin, a family practitioner in Tampa, said he's constantly getting calls and letters from PBMs, scolding him for prescribing too many brand name drugs or nonformulary brands. "I throw it all in the trash," he said. "You can fight them and jump through hoops faxing requests. It all comes down to third parties practicing medicine."

Ken Daniels, vice president of operations at Medco's NetPark center, said no prescription changes are ever made without a doctor's permission. And he said doctors and patients are pointing in the wrong direction when they blame PBMs.

"One of the misperceptions is that we dictate what drugs they got," he said. "The plan the patient belongs to tells us what drugs they get."

Daniels said calls to physicians and patients tend to slow the process of moving a prescription along. "Our company has spent quite a bit of time and effort getting the latest, greatest technology," he said. "Then we end up playing phone tag."

Still, within 24 hours of arriving at the NetPark facility, 94 percent of prescriptions are sent electronically to Medco dispensing centers in Tampa, Las Vegas or Willingboro, N.J.

Las Vegas and Willingboro have automated pharmacies, which together fill 1.3-million prescriptions each week. The Tampa location, which relies on workers to fill prescriptions manually, specializes in low-volume medications, temperature-sensitive drugs and specially formulated compounds. It dispenses about 75,000 prescriptions each week.

While Medco is processing prescriptions in one part of Tampa and shipping out pills at another, its office in Hidden River takes calls from customers wanting to know where their pills are, how to take them and how to get more.

The Tampa call center opened in November in Salomon Smith Barney's former back-office facility. Its 448 employees answer more than 60,000 calls a week, about one-third of them requesting refills.

The office's main customer is the Federal Employees Plan, which has 4-million members. Hansen, the center's supervisor, said about half of the calls come from retirees, so his workers get special "senior sensitivity training."

"We have them put on heavy glasses to try to read a prescription, work gloves to try to open a pill bottle and (put) cotton in their ears to hear," Hansen said. "We want to teach them patience over the phone."

While there may be a premium on patience, there's also an emphasis on answering and completing calls as quickly as possible. Brightly colored light boards scattered on the walls of the call center flash a running tally of the number of calls waiting, average length of wait and average time to complete a call.

Customer service reps handle from 50 to 80 calls a day, Hansen said, with the average call lasting less than five minutes. Though most are fairly routine -- and an increasing number of refill orders are handled without human intervention by Medco's interactive voice response system -- there are exceptions.

"When the news came out earlier this summer about the hormone replacement studies, we were deluged for a week," he said. "And any time there's a major new drug in the news, we hear about it."

Calls with medical questions are referred directly to the center's 32 pharmacists, who sit beneath a row of framed licenses at one end of the call center.

"Any calls about drug utilization, interactions or how to take the drug go straight to the pharmacists, not the customer service reps," Hansen said. "The biggest thing we have to teach reps is what they can't answer. They learn just enough to be dangerous."

-- Kris Hundley can be reached at or (727)892-2996.

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