SureScripts - RxHub Announce Merger

Sure-RxHub Merger FAQs

The Basic Facts Of The Deal
The Significance Of The Deal

The Basic Facts Of The Deal

What are the financial terms of the deal?
When do you expect to close the deal?
Who owns the company?
What is the makeup of the Board?
Who are the board members?
Who will lead and manage the merged company?
What will the merged company be named?
Where will the merged company be headquartered?

What are the financial terms of the deal?
It was a cashless transaction. SureScripts owners (NACDS and NCPA) retain 50 percent ownership as do RxHub’s owners (CVS Caremark, Express Scripts and Medco Health Solutions).

When do you expect to close the deal?
The deal closed on June 30, 2008. Both organizations have signed and closed definitive agreements to merge the companies and to consolidate their operations.

Who owns the company?
It is a 50/50 split: SureScripts owners (NACDS and NCPA) retain 50 percent ownership as do RxHub’s owners (CVS Caremark, Express Scripts and Medco Health Solutions).

What is the makeup of the Board?
The new six-member board includes a single director each from CVS/Caremark, Express Scripts, Medco Health Solutions, NACDS and NCPA. The sixth member of the board is designated by NACDS and NCPA. John Driscoll, president, Insured & Emerging Markets, Medco Health Solutions, Inc. and Bruce Roberts, executive vice president and CEO, NCPA will serve as co-chairmen of the board of directors through 2009. The co-chairmanship will then rotate on an annual basis to include one co-chair representing PBMs and the other co-chair representing retail pharmacies.

Who are the board members?

John Driscoll – President, New Markets, Medco Health Solutions, Inc.
Donald C. Huonker - Senior Vice President, Healthcare Innovation, Walgreen Co.
Steve B. Miller, M.D., MBA - Chief Medical Officer, Express Scripts, Inc.
Ralph Petri – Senior Vice President, Pharmacy, Kerr Drug
Bruce Roberts - Executive Vice President & CEO, NCPA
Jeffrey T. Smith - Vice President, Physician Connectivity, CVS/Caremark

Who will lead and manage the merged company?
Initially, the new organization will be jointly managed by the acting CEO of RxHub, J.P. Little, and the acting CEO of SureScripts, Rick Ratliff. The new board has engaged Spencer Stuart to conduct a search to select a CEO and expects to name a CEO shortly. Little and Ratliff are among the candidates for the position.

What will the merged company be named?
The company is embarking on a new branding strategy. In the interim, the company will be referred to as SureScripts-RxHub, LLC.

Where will the merged company be headquartered?
The organization will maintain its existing office locations in St. Paul, MN and Alexandria, VA.

The Significance of the Deal

What is the benefit of these two organizations coming together?
How does this merger benefit patients and their physicians? What about pharmacies? PBMs? Payers? Technology Vendors?
Why is this merger happening now?
What percent of prescriptions are electronically prescribed today?

What is the benefit of these two organizations coming together?
The merger will result in a single, nationwide network that enables more clear, accurate and efficient communications between prescribers, pharmacists, pharmacy benefits managers. The merger will make available critical information that every physician should have in front of them when they prescribe and, in doing so, accelerate the country’s transition toward a paperless prescription process that will save billions of dollars and thousands of lives.

RxHub’s expertise in patient identification and delivering drug benefit information to the physician at the point of care complements SureScripts’ focus on electronic prescription routing from the physician’s office to the pharmacy. The merger combines these strengths with a shared focus on more access to patient medication history to form a single suite of comprehensive services. The services delivered by the combined organization will enable physicians to securely access vital health information via their preferred certified clinical solution for patient level clinical decision support. They will be able to do so from a more comprehensive health information exchange that
will in turn allow them to transmit electronic prescriptions and refill requests to and from either retail or mail order pharmacies as directed by the patient.

For the hundreds of technology vendors developing electronic medical records – as well as other clinical software that includes e-prescribing functionality – used by physician practices across the United States, the merger of RxHub and SureScripts will offer a single, unified process for contracting, testing, certifying, implementing and supporting their product’s connection to a single network and the wide range of services it provides. Streamlining these processes will save the industry time and money and give more physicians more of the information they need to provide quality care to their patients.

How does this merger benefit patients and their physicians? What about pharmacies? PBMs?
Payers? Technology Vendors?

Patients:

Reduces the opportunity for medication errors by ensuring greater consistency between what a physician intends to prescribe and what is actually communicated in the prescription
Makes it more convenient to get a prescription filled

Avoid delays and hassles at the pharmacy related to drug coverage
Avoid two trips to pharmacy -- one trip to drop prescription off and one to pick it up (if filled at retail)

Helps prevent adverse drug events, which kill or injure thousands of people every year
By having a patient’s medication history and insurance plan information, the physician can prescribe the most therapeutically appropriate medications that are covered by insurance as well as recommend inexpensive generic alternatives. This saves the patient money.

Physicians:

Provides doctors with more information to determine the most clinically appropriate and cost effective medication for the patient
Reduces the opportunity for medication errors by ensuring greater consistency between what a physician intends to prescribe and what is actually communicated in the prescription
Enables secure and efficient routing of prescription to patient’s choice of pharmacy (i.e. retail and/or mail)
Automated prescription renewals increase practice efficiency and create more time with patients
Service continues to be provided at no charge

Pharmacies:

Will increase use of paperless prescribing and delivery of “clean” prescriptions requiring less rework

Reducing the opportunity for medication errors by ensuring greater consistency between what a physician intends to prescribe and what is actually communicated in the prescription
Offering prescribers access to a more comprehensive formulary service means less rework at the pharmacy
Reducing paperwork increases efficiency, allows more time with patients

Preserves patient choice of pharmacy (mail order or retail)
Studies have shown that electronic delivery of prescriptions can improve patient adherence to their medications

Payers/PBMs:

Streamlined testing and certification process allows for improved supply of benefit and medication history information
Drives down costs by providing drug formulary and generic availability information to physicians at the point of care
Improves quality of care and drives down costs by reducing medication errors, increasing use of generics and improving patient adherence

Technology Vendors:

Single contract for a comprehensive suite of services

Prescription routing to retail and mail pharmacies
Eligibility
Formulary
Medication history

Streamlined testing and certification process reduces the cost for integration of benefit and clinical information sources as well as prescription routing
Single network connection for access to a broader set of benefit information
Integrated feed of retail pharmacy and payer/PBM medication history
Coordination with one organization for deployment and support
More consistent information and single process will enable software providers to focus on workflow and clinical decision support.

Why is this merger happening now?
The timing of today’s merger is no coincidence. It reflects the view by all board members that the merger will complement recent
events to greatly accelerate the nation’s move toward paperless prescribing and the secure, electronic exchange of health information.
The transaction will add to key developments over the past six months to give e-prescribing unprecedented momentum. These developments include:

In December of 2007, U.S. Senator John Kerry joined with former Speaker and founder of the Center for Health Transformation Newt Gingrich and a number of Senate colleagues to announce the introduction of the Medicare Electronic Medication and Safety Protection Act (“E-MEDS”). The E-MEDS bill proposes to offer physicians reimbursements for investing in e-prescribing technologies as well as incentive payments each time a prescription is transmitted electronically and the claim is submitted through Medicare.
During that same week in December, U.S. Senator Sheldon Whitehouse chaired a Senate Judiciary Committee hearing on the Drug Enforcement Administration’s policy prohibiting e-prescribing of controlled substances. This policy requires physician practices to maintain two separate processes for prescribing: one that is paper-based for controlled substances and another that is electronically based for all other medications. In the view of many physicians and pharmacists, the administrative burden of maintaining two separate processes is a significant barrier to the adoption and use of e-prescribing. If the DEA were to permit e-prescribing of controlled substances, it would represent another potential boost to e-prescribing adoption and use.
On March 4, 2008, the American Academy of Family Physicians (AAFP), the American Academy of Pediatrics (AAP), the American College of Cardiology (ACC), the American College of Obstetricians and Gynecologists (ACOG), the American Osteopathic Association (AOA) and the Medical Group Management Association (MGMA) took the unprecedented action of not only announcing their support for e-prescribing, but launching a nationwide program and an online portal – www.GetRxConnected.com – where physicians can follow a step-by-step process designed to help them transition from paper-based prescribing to e-prescribing.
On April 2, 2008, the Centers for Medicare and Medicaid Services issued final standards for e-prescribing under the Part D Medicare drug program.
As of April 14, 2008, the following consumer-oriented organizations have formally voiced support for e-prescribing: AARP; AFL-CIO; American Federation of State, County, and Municipal Employees; Center for Medical Consumers; Childbirth Connection; Consumers Union; Health Care For All; National Consumers League; National Family Caregivers Association; National Partnership for Women & Families; and SEIU.
On June 27, 2008, the DEA proposed regulations that would provide physicians and other authorized prescribers with the option of issuing electronic prescriptions for controlled substances. These regulations would also permit pharmacies to receive, dispense, and archive these electronic prescriptions. The agency is seeking public comment on the proposed regulations through September 25, 2008.

What percent of prescriptions are electronically prescribed today?

Of the estimated 1.47 billion new prescriptions and renewals eligible for electronic routing in the U.S. in 2007 – two percent (2%) were electronically prescribed.
For 2008, we estimate the number of prescription transactions routed electronically will grow to over 100 million, thereby increasing the percentage of the nation’s new prescriptions and renewals transmitted electronically to approximately seven percent (7%).