California Public Employees' Retirement System chooses CVS Caremark to administer prescription benefits for its 346,000-plus members; three-year contract represents roughly US$565M/year in prescription spending

Cindy Allen

SACRAMENTO, California , June 23, 2011 (California Public Employees' Retirement System) – The California Public Employees’ Retirement System today announced it has selected CVS Caremark to administer prescription drug benefits for more than 346,000 members of CalPERS self-funded PERS Select, PERS Choice and PERSCare preferred provider organizations (PPOs).

The three-year contract represents approximately $565 million in annual drug spending. It will take effect on January 1, 2012 with the option of two one-year extensions. CVS Caremark, based in Woonsocket, Rhode Island, will succeed Medco Health Solutions, which has been the PPOs’ pharmacy benefits manager since July 1, 2006 under a contract that ends December 31, 2011.

“We are confident that Caremark will meet the needs of our members. Our team is working with CVS Caremark and Medco to make sure that the transition for our members and physicians will be as smooth as possible,” said Ann Boynton, Deputy Executive Officer, CalPERS Benefit Programs Policy and Planning. “We are committed to the health and safety of our members and we have included a number of measures in our contract with Caremark to improve transparency and protect our members.”

In reference to a pending whistleblower litigation alleging irregularities in Caremark practices, Boynton said, “Neither CalPERS nor any of our officers or employees are party to the action, which we have carefully considered throughout our contract negotiations.”

CVS Caremark will offer several new benefits:

A Maintenance Choice Program will allow members to pick up a 90-day supply of medication directly from a CVS pharmacy at a time convenient to them. They will pay their typical mail order copay for a prescription on the same day and be able to talk face-to-face with a pharmacist.
The Gaps in Care Plus Medical Program will use an integrated medico-pharmaceutical approach to identify potential gaps and omissions in drug and medical therapy for participating CalPERS members.
Members will be able to save money by choosing "best choice" medications (generics and preferred brands) and 90-day supplies, where appropriate, in the iBenefit personalized mailing program.

Caremark was the pharmacy benefits manager for the PPO program from January 1, 2003 through 2005. CVS Caremark is pledged to provide superior performance and member satisfaction in its new partnership with CalPERS.

CalPERS is the largest purchaser of public employee health benefits in California, and the second largest public purchaser in the nation after the federal government. It spends approximately $7 billion a year to provide care to active and retired State and local government employees, retirees, and their family members. For more on CalPERS, visit www.calpers.ca.gov.

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