Zacks_Analysts' Blog : Medco Programs Get Accredited - Analyst Blog

Medco Health Solutions (MHS), a leading health care-related company providing pharmacy benefit management (‘PBM’) and Specialty Pharmacy services, recently announced that Utilization Review Accreditation Commission (‘URAC’) has accredited its PBM and Drug Therapy Management (“DTM”) programs.

URAC reached its decision after conducting a detailed review of over 400 parameters at Medco’s headquarters, call centers and Therapeutic Resource Centers (“TRC”).  The accrediting body studied a range of services provided by Medco such as its RationalMed patient safety system and its drug utilization review mechanism.

Medco’s DTM efforts include the TRCs, who arrange the facilities that help trained Specialist Pharmacists cater to patients with complex or chronic medical conditions. According to the company, these Specialist Pharmacists give a new shape to the business.    

An aging population coupled with the associated higher frequency of chronic diseases continues to drive demand and add to the escalating cost of new drug therapies. As a result, we expect the outlook for the PBM industry to remain positive. The company has adopted several strategies in the recent past to increase its footprint in the European market, which hold potential. Moreover, increased opportunity for Medco lies in the form of introduction of generics over the next few years.

Although the PBM industry remains highly competitive, especially in the current backdrop of economic uncertainty, we are encouraged by the company’s client renewals for 2011. Medco competes with Express Scripts (ESRX) among other players. We currently have a Neutral recommendation on Medco.

URAC is an independent nonprofit body promoting quality in healthcare by accrediting healthcare organizations. It offers a broad range of benchmarking programs and other services.