Medco wins MLGW benefits contract [The Commercial Appeal, Memphis, Tenn.]

Aug. 20--In recent weeks, Medco Health Solutions Inc. sent executives to Memphis Light, Gas and Water board meetings to emphasize how much they wanted a pharmacy benefits management contract with the utility.

That lobbying, along with the company's presence in Memphis through its Accredo subsidiary, helped Medco win a three-year, $53.9 million contract to handle pharmacy benefits for a large group of MLGW workers and retirees.

The utility's board voted unanimously Thursday to grant the contract to Medco, rather than Express Scripts, which had provided the best bid of seven companies that had applied.

Medco's bid was the second-best, about $123,000 per year more than that of St. Louis-based Express Scripts Inc., said Charles Perry, the utility official in charge of risk management.

Express Scripts currently handles MLGW's PPO drug plan.

Starting Jan. 1, Medco will begin administering pharmacy benefits for the 1,875 current employees and 2,228 retirees covered through the program.

Franklin Lakes, N.J.-based Medco is the parent company of Accredo Health Group, which handles specialty drugs.

In a speech before the board Thursday, Accredo president Steve Fitzpatrick and Medco regional vice president Gina Gruhn emphasized that Accredo employs 1,800 people in the Memphis area.

"They're a big part of our economic vitality of this community," said board member Steven Wishnia.

The utility board also approved an annual $27.4 million contribution to MLGW's pension fund for retirees. And the board approved an $18.8 million contribution for a special retiree health care fund.

Commissioners also approved a 90-day, $651,000 extension to a contract with CDA Inc., which works with Top Notch Security Inc. to provide guards at various facilities.

Earlier this year, another Memphis company, Imperial Security, presented a lower bid than CDA.

But board member Dedrick Brittenum said accepting the Imperial contract would likely result in a big pay cut for the current security guards, and he couldn't accept that result.

The utility's president and CEO, Jerry Collins, said he doesn't want another extension and will try to bring a better solution back to the board.

-- Daniel Connolly: 529-5296

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