Executives involved in the merger between drug provider Accredo Health and pharmacy benefit manager Medco Health Solutions, which shareholders approved only a few days ago, say the move will provide savings for health insurers.
The merger is a result of Medco’s $2.3 billion acquisition of Accredo, and is expected to create the largest specialty pharmacy operation in the US with over $4 billion in annual net revenues.
According to a study by Chicago-based Aon Consulting, specialty drug insurance costs will rise 22.5% this year. These types of drugs, which are used to treat conditions such as cancer, anemia, multiple sclerosis and rheumatoid arthritis, are usually developed from costly biotech research. They often require refrigeration and need to be either injected or taken through other specialist methods of administration.
Medco believes that the Accredo acquisition will reduce health care costs as a result of providing more services from a single company. It also says it will bring down the cost of expensive hospital visits through better patient monitoring.