And the Winner of the State of Maryland’s $2.4 Billion Pharmacy Contract Is?

Maryland is again poised to pay Express Scripts $2.4 billion to manage the prescription drug program for its employees, retirees and their dependents. The decision would cap a nearly year-long battle between the company and Catalyst Rx, the state’s current pharmacy benefits manager, over who holds such a lucrative state contract.

Maryland’s Board of Public Works, the state’s top contract-approving panel, could agree to the five-year deal this week. The spending board was first scheduled to approve Express Scripts’ award in March 2011, despite at least four protests from Catalyst Rx.

The appeals board denied Catalyst Rx’s most recent protest Jan. 11, according to documents filed with the Board of Public Works. Meanwhile, the state says it could save as much as $102 million by awarding the deal to Express Scripts, one of the nation’s largest pharmacy benefit managers.

Maryland also considered Envision Pharmaceutical Services Inc. of Ohio, but its bid was the most costly of the three. Catalyst claims that awarding the state’s prescription drug contract to Express Scripts could force nearly 46,000 Maryland state employees to switch their prescription distributor.

Express Scripts offered in March 2011 to take over the Maryland contract from Catalyst Rx, for $50 million less over five years. That savings appealed to the administration of Gov. Martin O’Malley, which was wrestling with a $1.6 billion budget gap.

The contract is to manage the prescription drug program for 200,000 current and retired state workers over the next five years. The company would process drugs claims and negotiate lower prices for medications with pharmacies and manufactures.

Catalyst Rx took the state contract away from Caremark in 2006, even though it was not the lowest bidder. Caremark took up an administrative challenge, a process that took a year. In that instance the state used the incumbent firm until the appeals were settled. Caremark eventually lost its appeals, but the move effectively turned a five-year contract into a four-year contract for Catalyst Rx.