PCS RECAP ON-LINE RxDRUG CLAIMS PROCESSING SYSTEM

PCS RECAP ON-LINE RxDRUG CLAIMS PROCESSING SYSTEM is in 12% of member pharmacies, the McKesson spinoff noted in its just-released annual report for fiscal 1988 (ended March 31). Recap is now linked to 7,500 of the 61,000 PCS member pharmacies and "is processing over 1 mil. claims a month," the annual report states. "We expect the system to be fully operational by late calendar-year 1989." The company explained that the Recap system allows the pharmacist to first verify a cardholder's eligibility and then to submit the claim electronically to PCS. Electronic claim submission eliminates paperwork at the pharmacy level as well as the necessity to process the claim manually. PCS estimates that it spent $ 2.5 mil. on the Recap system is fiscal 1988, and will have spent a total of $ 20 mil. on the Recap system by the time it is fully operational. "Even more significant for future growth, Recap allows us to offer clients a wide range of custom-tailored plans -- including such features as annual deductibles and maximums -- and will be able to check for drug interactions," the annual report continues. "PCS is strategically positioned to capture a growing share of the estimated 145 mil. Americans covered by employer-sponsored major medical insurance plans." With its market leadership and the expanded capabilities of the Recap system, PCS is well positioned for the prescription claim processing opportunities that are going to become available with the outpatient drug coverage provisions of the Medicare Catastrophic care bill. PCS estimates that it currently has a 12% market, compared to 7% for its nearest competitor. Cardholders increased 27% in fiscal 1988 to 7.7, while the number of claims paid rose 31% to 75.8 mil. The total $ 1.2 bil. value of claims paid during the 12 months reflects a 43% increase over fiscal 1987. Total PCS revenues were $ 76.7 mil. in fiscal 1988, an increase of 41%, while net income jumped 51% to $ 11.5 mil. Approximately 23% of revenues, or $ 17.8 mil., and about 8% of the operating profits, or just over $ 2 mil., were derived from Pharmaceutical Data Services (PDS). The annual report notes that during the year PDS' prescription audit arm, Alpha Data Service, doubled the number of retain pharmacies from which it receives data, from 5,000 to 10,000. "By 1990 that number is expected to increase to 17,000 chain and independent pharmacies from which PDS expects to capture 2 mil. prescriptions each day -- half of all prescriptions dispensed in the U.S.," the annual report states. In addition to its core Alpha Data operation, PDS offers three other services: Scriptrac, which profiles physician prescribing patterns; Consumer Data Bureau, which measures consumer attitudes about pharmaceuticals; and the tracking of hospital pharmaceuticals through affiliate International Health Services.