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Medco Buys DNA Direct – Genetics Healthcare Company to Incorporate Genomic Informational Algorithms

Posted Feb 02 2010 8:41am

For those readers that are not keen on technology this may stand to be another awakening to the fact that algorithmic codes create profits, along with the automated hardware to fill prescriptions.  See a prior post below where the money was just under 15 billion, not million, billion with a B.  How do they do this, if you read up at the link below and watch the video at the site, you can even hear the reporter covering the story and asking “where are the people, do people really work here”.  Big profits from big pharmacy benefit managers leave cash around for acquisitions.  

We have a 2 fold goal here, improve financial outcomes, (and they are raging to begin with) and better clinical outcomes.  Now, coupled with DNA centric business intelligence algorithms the company appears to have the in-house connection for additional genetic testing. One thing with any pharmacy benefit manager to keep in mind is that your medication data is available for sale, so it will be interesting to watch and see if some genomic information through pharmacogenomics slips in here in some shape or form.  Pharmacy Benefit managers data does not fall under HIPAA so all your medication records are sold to “those who want to know” such as underwriters.  One reflection here too is that there’s a ton of money made on Medicare part D with prescriptions and this is part of the chain from getting a prescription from the doctor into your hands via mail order, and some pharmacy retail chains have issued complaints in this area with patients not having the ability to meet directly at all times with a pharmacist. 

Again, when reading here you can see the emphasis on payers here as this is where the company stands to make money, from insurance companies that pay for your medications.  Every time you fill a prescription through any pharmacy benefit company, your medication file for sale gets bigger and probably worth a few more bucks.  

Many employers have already moved in different directions such as Wal-mart and offer their own generics at a low cost of $4.00 without all the cost of reporting back to insurance carriers for compliance.  Again, this will be interesting to watch to see how this comes together and how information is used and analyzed.  Right now my own personal feelings, and probably due to the amount of research I do on this blog, I could care less and am more concerned over privacy and quality of life without the huge data trails corporate structures are building to create profits. Luckily, most of what I need is taken care of by the $4.00 generic drug programs offered as so many are cheaper than the co-pays anyway through pharmacy benefit managers, but again I am middle aged and may have a different point of view than someone in their 20s.  Right now I value privacy over genomic information, but again that is just me.  BD 

Press Release:

Combined capabilities will deliver precision health services designed to improve clinical and financial outcomes

FRANKLIN LAKES, N.J. and SAN FRANCISCO, Feb. 2, 2010 –– Committed to being at the forefront of translating personalized medicine from the science to its daily practice in healthcare, Medco Health Solutions, Inc (NYSE:MHS) today announced the acquisition of DNA Direct, Inc., a leader in providing guidance and decision support for genomic medicine to patients, providers, payors and employees. Financial details of the acquisition were not released.

“DNA Direct has been a recognized pioneer in assimilating knowledge about molecular diagnostic testing and deploying certified genetics professionals to help rationalize the opportunities and implications faced by many in this new and rapidly evolving field,” said David B. Snow Jr., Medco chairman and chief executive officer.

By integrating DNA Direct’s physician, client and patient support services and capabilities with Medco’s growing portfolio of personalized medicine capabilities and extensive customer base, Medco intends to deliver a broader suite of precision health services, ranging from consumer education to clinical decision support.

“Medco is simply the most innovative and forward thinking healthcare company in the industry today,” said Ryan Phelan, DNA Direct founder and CEO. “Having spent the past 25 years as an entrepreneur translating healthcare information to patients, I can’t think of a better partner to take personalized medicine to the next level.”

DNA Direct is the first genomics-focused company offering URAC-accredited utilization management programs to help payors ensure the appropriate use of the more than 2,000 genetic and molecular tests available today. URAC is a Washington D.C.-based health care accrediting organization that establishes quality standards for the health care industry. DNA Direct’s national call center of genetic experts, complemented by online decision support services help physicians and patients determine if genetic tests are appropriate and how to use genetic test results to guide clinical decisions. Medco’s existing personalized medicine approach encompasses a robust pipeline of important pharmacogenetic research, turnkey testing programs for drugs like tamoxifen and warfarin, and warnings on over 50 drug-gene interactions, which are used by Medco's specialist pharmacists to inform physicians and patients about potential therapy adjustments to ensure the safety and efficacy of the treatment.

“When a Fortune 50 company like Medco makes a commitment to personalized medicine with an acquisition like this, it’s proof positive that we are at a turning point in the healthcare industry,” said Sharon Terry, president and CEO of Genetic Alliance. “Integrating Medco’s phenomenal capacity to respond to its members, with the innovative and creative patient-focused services of DNA Direct is a win for all consumers.”

The DNA Direct purchase builds upon Medco’s commitment to advancing pharmacogenomics (PGx), a cornerstone of which is the company’s Personalized Medicine Research Center.  The research center is dedicated to furthering the understanding of the impact of genetics on patient medication response and applying that science to clinical practice. As knowledge is gained through the research, applications will be rolled out to the broader client base within Medco’s precision health services.image

“By integrating proven state-of-the-art science into every day care, we are providing patients and providers with actionable information that drives more personalized care to achieve higher efficacy or improved safety,” said Dr. Robert Epstein, Medco’s chief medical officer. “We have already started this today with our existing Personalized Medicine programs. DNA Direct will serve to accelerate our speed-to-market implementation capabilities, transforming research into actionable services to meet the demands of our clients and patients.”

About Medco

Medco Health Solutions, Inc. (NYSE: MHS) is pioneering the world’s most advanced pharmacy® and its clinical research and innovations are part of Medco making medicine smarter™ for more than 60 million members.

With more than 20,000 employees dedicated to improving patient health and reducing costs for a wide range of public and private sector clients, and 2008 revenue exceeding $51 billion, Medco ranks 45th on the Fortune 500 list and is named among the world’s most innovative, most admired and most trustworthy companies.

For more information, go to http://www.medcohealth.com.

About DNA Direct

DNA Direct was founded in 2005 to deliver guidance and decision support for genomic medicine to patients, providers and payers -- reducing health risks, preventing disease, and better targeting therapies.  The first genomics-focused company to receive full URAC accreditation for utilization management in the U.S, DNA Direct’s comprehensive clinical programs combine proprietary technology with genetic expertise including a national call center of genetic experts, web-based applications, and educational resources and training. The company is based in San Francisco and was backed by Firefly Investments and Lemhi Ventures. For more information, visit www.dnadirect.com.

This press release contains “forward-looking statements” as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that may cause results to differ materially from those set forth in the statements. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements in this press release should be evaluated together with the risks and uncertainties that affect our business, particularly those mentioned in the Risk Factors section of the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission.

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