By Shera Dalin
With brand new corporate headquarters and technology-based plans
to grow, Express Scripts Inc. continues a strong expansion rate.
In addition to an average growth rate of 32 percent a year and
projected cash flow this year of up to $975 million, the pharmacy
benefit manager is expanding its 321,000-square-foot headquarters
at the University of Missouri -St. Louis campus. Express Scripts
is building on campus a $30 million, 181,000-square-foot office
with a three-story parking garage and two surface parking lots.
The new building is expected to be finished by December and
will relocate 900 employees alongside the 1,100 already working
at the corporate headquarters.
The physical and financial growth is due to Express Scripts’
business model, says Dr. Steve Miller, chief medical officer
of the company.
“Express Scripts works to make drugs safer and more affordable
for our customers and their employees. The formula we have for
doing that has been incredibly successful,” he says.
“As a corporation, it’s grown fast, quadrupling profit over
the last five years. It’s been a great story for St. Louis and
in our industry.”
Express Scripts, as the nation’s third largest pharmacy benefits
manager, holds down drug costs by encouraging members to use
less-expensive generic medications, rather than pricier brand-name
drugs. Nearly two-thirds of the 500 million prescriptions it
filled last year were for generic medications. And the company
estimates that the number could easily grow to 75 percent or
more, which could cut pharmacy bills by up to 20 percent.
“This doesn’t happen by accident,” Miller says. “It’s a very
well-thought-out program.”
Express Scripts encourages members whose doctors write prescriptions
for brand name drugs to consider generics. The company contacts
members through letters and offers to call their doctors to
ask that prescriptions be rewritten for generics.
“We try to help the patient have a healthier, less expensive
outcome,” Miller says.
Express Scripts is always looking for ways to improve the health
and pocketbooks of patients. The company checks prescriptions
to make sure they match up with the diagnosis the patient has
been given. Doing that can eliminate mistakes, Miller says.
“We are looking for opportunities for better health outcomes,”
he says. “We believe Express Scripts has to push the frontiers
of the pharmacy benefits landscape.”
Another example is monitoring patient medication use from the
company’s specialty pharmacy, one of the largest in the U.S.
For example, a patient with hepatitis C, which is on the rise,
must take a drug for nine months with side effects that make
the patient feel “really rotten,” Miller explains. At a cost
of $1,500 a month, if a patient stops taking the medication
a few months into treatment, those treatments have been wasted.
Express Scripts works with the patient to coach him or her through
the side effects and keep the treatment on track.
“We can prove that we can get more of these people through their
treatment because we have developed a high touch model,” Miller
says.
Express Scripts also has its eyes on the future of generic medicines.
The company is pushing Congress to update laws that determine
how the FDA regulates and approves how brand name drugs become
generics. No mechanism exists for the FDA to approve biologic
drugs, which are developed from plant and animal cells, for
generic equivalents after their patents expire. Drug makers
like the situation because it enables them to sell drugs at
higher prices. But Miller has testified several times before
the U.S. House and Senate urging Congress to allow the FDA to
approve generic versions of biologics.
“This is crucial for us to benefit our customers. We know who
we work for; we work for the client and for the patient,” he
says.
After using conservative assumptions, Express Scripts estimates
that the savings on generic biologics would be $71 billion over
10 years on just four drugs.
“This is a tremendous growth opportunity,” Miller says.
Wall Street has started paying attention to the growth opportunities
overall at Express Scripts. When the company attempted a hostile
takeover of competitor Caremark last year, which wanted to sell
itself to drugstore chain CVS, Express Scripts garnered a lot
of attention from analysts and investors.
“We were able to get out in front of Wall Street and the big
investor community, and describe our model. They said this company
is different and that’s one of the reasons we’ve had such a
successful year, not only on Wall Street, but also in sales.
“At the end of the attempt, we actually believe we came out
a winner.”
And Miller predicts that growth is on the horizon for the immediate
future. The company credits long-term contracts with clients,
increased demand for mail order pharmacy services, lower costs,
and increased productivity.
“This model has plenty of room to run for years,” Miller says.
