Express Scripts 2014 Annual Report Download - page 15

13
Express Scripts 2014 Annual Report
Ourclinicalsolutionsstaffofpharmacistsandphysiciansprovidesclinicaldevelopmentandoperationalsupport
forourPBMservices.Thesehealthcareprofessionalsareresponsibleforawiderangeofactivitiesthathelpmaketheuseof
prescriptiondrugssaferandmoreaffordable,includingidentifyingemergingmedication-relatedsafetyissuesandnotifying
physicians,clients,andpatients(asappropriate);providingdruginformationservices;formularymanagement;developmentof
utilizationmanagement,safety(concurrentandretrospectivedrugutilizationreview)andotherclinicalinterventions;and/or
contactingphysicians,pharmacistsorpatients.
Ourresearch&analyticsteamconductstimely,rigorousandobjectiveresearchthatsupportsevidence-based
pharmacybenefitmanagementandevaluatestheclinical,economicandmemberimpactofpharmacybenefits.Theformation
ofpredictivemodelsandotheranalyticaltoolssupportsthedevelopmentandimprovementofourproductsandservices.The
teamalsoproducestheExpress Scripts Drug Trend Reportwhichexaminestrendsinpharmaceuticalutilizationandcost,as
wellasthefactorstriggeringthosetrends,includingbehaviorsthatresultinwastefulspendinginthepharmacybenefit.
Information Technology.Ourinformationtechnologydepartmentsupportsourpharmacyclaimsprocessing
systems,ourspecialtypharmacysystemsandothermanagementinformationsystemsessentialtoouroperations.Aswe
completetheintegrationprocessfromtheMerger,administrativesystemswillcontinuetobemigratedtowardsaconsolidated
ITplatform.
Uninterruptedpoint-of-saleelectronicretailpharmacyclaimsprocessingisasignificantoperationalrequirement
forus.ClaimsforourPBMsegmentareprocessedintheUnitedStatesthroughsystemsmanagedandoperateddomesticallyby
internalresourcesandanoutsourcedvendor.CanadianclaimsareprocessedthroughsystemsmaintainedandoperatedbyIBM
inCanadaandmanagedbyus.WebelievewehavesubstantialcapacityforgrowthinourUnitedStatesandCanadianclaims
processingfacilities.
Specialtypharmacyoperationsaresupportedbymultiplepharmacysystemsmanagedandoperatedinternally.
Weleverageoutsourcedvendorservicestoprovidecertaindisasterrecoveryservicesforsystemslocatedatour
datacenters.Forsystemsnotcoveredbyathird-partyvendorarrangement,suchasourspecialtypharmacydatacenters,our
corporatedisasterrecoveryorganizationmanagesinternalrecoveryservices.
Competition
ThereareanumberofotherPBMsintheUnitedStateswithwhichwecompete.Someoftheseareindependent
PBMs,suchasCatamaranandMedImpact.OthersareownedbymanagedcareorganizationssuchasAetnaInc.,CIGNA
Corporation,Humana,OptumRx(ownedbyUnitedHealthGroup)andPrimeTherapeutics(ownedbyacollectionofBlue
CrossBlueShieldPlans).Someareownedbyretailpharmacies,suchasCVSCaremark(ownedbyCVS).Wal-MartStores,
Inc.engagesincertainactivitiescompetitivewithPBMs.Wealsocompeteagainstadjudicators,suchasArgus.Withthe
emergenceofalternativebenefitmodelsthroughPrivateExchanges,thecompetitivelandscapealsoincludesbrokers,health
plansandconsultants.Someofthesecompetitorsmayhavegreaterfinancial,marketingandtechnologicalresourcesthanwe.
Inaddition,newmarketentrantsmayincreasecompetitivenessasbarrierstoentryarerelativelylow.Webelievetheprimary
competitivefactorsintheindustryincludetheabilitytocontractwithretailpharmaciestoensureourretailpharmacynetworks
meettheneedsofourclientsandtheirmembers,theabilitytonegotiatediscountsonprescriptiondrugswithdrug
manufacturers,theabilitytonavigatethecomplexitiesofgovernmentalreimbursedbusiness,includingMedicare,Medicaid
andthePublicExchanges,theabilitytomanagecostandqualityofspecialtydrugs,theabilitytoutilizetheinformationwe
obtainaboutdrugutilizationpatternsandconsumerbehaviortoreducecostsforourclientsandmembers,andthelevelof
serviceweprovide.
Government Regulation and Compliance
Manyaspectsofourbusinessesareregulatedbyfederalandstatelaws,rulesandregulations.Accordingly,we
maintainacomprehensivecomplianceprogramandwebelieveweoperateourbusinessinsubstantialcompliancewithall
existinglegalrequirementsmaterialtotheoperationofourbusinesses.Thereare,however,significantuncertaintiesinvolving
theapplicationofvariouslegalrequirements,theviolationofwhichcouldresultin,amongotherthings,sanctions.See“PartI
—Item1A— RiskFactors”foradditionaldetail.
9