Proposed contract for city employees' prescription plan triggers protest

September 24, 1992|By William F. Zorzi Jr. | William F. Zorzi Jr.,Staff Writer

A furor over the proposed award of a $68 million contract fo the city employees' prescription drug plan erupted yesterday at the Board of Estimates, as the city's personnel chief urged acceptance of the low bidder over a Blue Cross and Blue Shield of Maryland proposal.

A host of retired employees, independent pharmacists and city labor representatives objected to the proposed award of the contract to Express Scripts Inc., an affiliate of New York Life Insurance Co.

The groups were nearly unanimous in their objections, expressing concerns over Express Scripts' use of chain pharmacies to the near exclusion of smaller, independent, neighborhood pharmacies, which the groups said offer greater convenience and accessibility.

The independent pharmacists said the award to Express Scripts would be prohibitively costly to them because few would be able to participate in the plan, in which the city pays them set amounts for each prescription filled.

Jesse E. Hoskins, director of the Civil Service Commission, told the board the city would save $200,000 a year by awarding the contract -- which affects 42,000 employees and retirees -- to Express Scripts.

The contract would run for two years and could be extended under three one-year options.

Baltimore also is changing the way it handles the prescription plan, which is now handled by Paradigm Drug Management Inc., a wholly owned subsidiary of the Blues. As a result, Mr. Hoskins said, the city could save an estimated $8 million under its new self-insurance program because the city itself will be administering the plan that Express Scripts and Paradigm bid on.

Blues officials, including Paradigm President Joseph J. Filipek Jr., formally objected to the proposed award on grounds that the city's bid documents did not offer them the same flexibility for proposing a fee structure that the board asked of Express Scripts yesterday.

The board agreed to defer action until next week after asking Express Scripts to amend its proposal to include more local independent pharmacies. It also directed Express Scripts to submit a plan for a two-tier fill fee that would pay chain pharmacies one rate and independent pharmacies a higher rate.

James R. Thompson, Express Scripts' director of national accounts, agreed with a board request to recruit more independent pharmacies and to pursue the two-tier plan. But Mr. Thompson said the company could not submit a definite fee structure until an actual contract was worked out with the city.

Express Scripts submitted a proposal that would cost the city the "average wholesale price" of the drugs for each prescription less a 10 percent discount, plus a $2.45 fill fee paid to the pharmacists.

Paradigm's plan, as submitted, would cost the city the average wholesale price less the 10 percent discount, plus a $3.60 fill fee. But Mr. Filipek said the fill fee submitted was actually "a blend" of per-prescription rates paid to chain and independent pharmacists and not the actual amount that would be paid.

The Express Scripts proposal includes 117 participating pharmacies, mostly chain stores. Paradigm's plan includes the 390 chain stores and 300 independent pharmacies now participating in the Blues plan, officials for both companies said.

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