BY COUNCILOR KRAUSE:
RESOLVED, that the proper city officials are hereby authorized to execute an agreement with ClearScript, a division of Fairview Pharmacy Services, LLC, which will permit that company to provide pharmacy benefit manager services to the city’s group health plan from September 1, 2007, to December 31, 2008, for an administrative fee of $1.25 per member per month, for a total estimated cost of $60,000, to be paid from the group health fund, which agreement is on file in the office of the city clerk as Public Document No. _____________________.
STATEMENT OF PURPOSE: This resolution authorizes the city of Duluth to execute an agreement with ClearScript to provide pharmacy benefit manager services to the city’s group health insurance plans effective September 1, 2007. Prescription drug claims are currently processed by the city’s health plan administrator, Blue Cross and Blue Shield of Minnesota. The labor-management insurance committee has studied the issue of the rising cost of prescription drugs and has recommended that the city implement an independent pharmacy benefit manager in order to ensure complete transparency. ClearScript was the successful bidder for providing this service in the recently completed request for proposal process. The labor-management insurance committee recommends that ClearScript be approved to provide pharmacy benefit manager services. ClearScript’s discounts on generic prescriptions offsets its slightly greater administrative fee. In 2006, the city spent approximately $3.8 million for prescription drug claims. While additional changes to the co-pay structure or new pharmaceutical programs may require union negotiations, the estimated cost of prescription drug claims with ClearScript is $3.04 million, for an estimated savings to the city of $760,000.