O'Malley to pull $2.3b prescription drug contract
O'Malley's Department of Budget Management wants to award the mega-contract to an out-of-state firm with a history of complaints in more than two dozen states, including Maryland, of swapping drugs on patients. The company, Express Scripts, offered a price for the five year contract that came in $50 million less than the closest competitor.
The Maryland-based Catalyst Health Solutions Inc., which currently holds the contract, has filed multiple protests contesting the new award. O'Malley's decision will delay transferring the lucrative work until after the State Board of Contract Appeals process is finished, which could take a year.
"This is fairly standard for a contract of this size," said O'Malley spokesman Shaun Adamec. He added that the Maryland company should be able to "exercise all of its options."
Some in O'Malley's administration had previously argued that the potential savings from the new contract of roughly $15 million in the next budget was enough to operate outside the usual framework.
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, based in Rockville, won the contract five years ago from another firm. However, Catalyst had to wait a year before receiving payments from the state because of protests filed by the company that they beat.