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Marianne Kolbasuk McGee
July 1, 2008
4 Min Read
SureScripts and RxHub, the two largest networks for electronic prescription transactions in the United States, announced on Tuesday they are merging.
The value of the cashless, equity partnership deal wasn't disclosed. The consolidation of both operations will form a single secure national network for the exchange of prescription related data among physicians, pharmacies, and prescription benefit management organizations.
Both organizations were launched in 2001. RxHub was founded by three large prescription benefits management organizations, or PBMs, including CVS Caremark, Medco Health Solutions, and Express Scripts. SureScripts was formed by the National Association of Chain of Drug Stores and the National Community of Pharmacists Association.
Those group owners of RxHub and SureScripts will each retain a 50% ownership of the combined organization, which will be known as SureScripts-RxHub until a new name is chosen, Rick Ratliff, acting CEO of SureScripts, said in an interview with InformationWeek. The merged company has about 80 employees who will for now remain in RxHub and SureScripts respective offices in St Paul, Minn., and Alexandria, Va.
For the most part, the services offered by each were complementary, with SureScripts focused on routing e-prescriptions from doctor offices to retail pharmacies, and RxHub providing patient identification and prescription drug benefit information to doctor offices at the point of care.
Combined, the two organizations' services will provide ambulatory care doctors "richer" information at the point of care, said Ratliff. That includes combined data about patients' prescription history and paid claims -- which was information that RxHub provided via its network -- and also information about prescriptions that are dispensed and renewed at the retail pharmacy, which was data that SureScripts provided.
Collectively, the data can help doctors make better informed decisions about patient prescriptions at the point of care, as well as simplifying processes for doctors sending e-prescriptions handled by RxHub to mail-order companies run by PBMs such as Medco, versus e-prescriptions routed by SureScripts to retail pharmacies, like Wal-Mart or Walgreens.
The merger provides doctors with "a unified workflow, and that's a good thing" said John Halamka, CIO of CareGroup Healthcare System, which operates several Boston-area hospitals. E-health record software vendors that provide e-prescription functionality in their products didn't always support both RxHub and SureScripts networks in their products, and when they did, it meant additional work for the developers, he said.
In fact, the merger is likely to have the biggest impact on third-party application vendors that provide e-prescription and e-health record software to ambulatory doctors. SureScripts-RxHub plan to offer a unified process for third parties to test and certify that their products will work with the combined e-prescription network.
"Before you needed two of everything, now e-medical record vendors have one relationship, one contract" with SureScripts-RxHub, instead of individual pacts with both companies, said J.P. Little, acting CEO of RxHub.
The idea of a merger between RxHub and SureScripts has been "floating around for a while," said Little. However, it took time "to bring competing entities together. We had to get to the right point in time, with the right board members saying it was the right thing to do."
For now, Little and Ratliff will jointly manage the merged organization.
While e-prescriptions are slowly catching on, today still fewer than 10% of ambulatory care doctors in the United States have these systems in place, Ratliff said. Currently, there are about 50,000 U.S. ambulatory doctors writing e-prescriptions, up from about 35,000 about six or seven months ago, he said, and U.S. pharmacies process about 6 million e-prescriptions each month.
However, a couple of key potential regulatory and legislative moves by the U.S. government are expected to help bolster momentum for e-prescribing.
One is the Medicare Electronic Medication and Safety Protection Act of 2007, which Halamka said will likely be passed by Congress. The bill offers financial incentives to doctors who prescribe medications for the patients electronically.
The other government-related development is a proposal announced last week by the U.S. Drug Enforcement Agency to lift a ban prohibiting doctors from electronically prescribing controlled substances, such as narcotic drugs. For those controlled medications, doctors are currently required to write paper-based prescriptions.
By lifting the ban, doctors and pharmacies would no longer be burdened with two separate prescription processes for controlled substances and all other medications. The DEA is accepting public comments on the proposed changes until late September.
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