NATIONAL MEDICAL HEALTH CARD SYSTEMS INC. Port Washington, New York Drug Benefit Manager: Size Doesn't Matter.(THE NEW AMERICA)

Byline: MARILYN ALVA

When it comes to managing prescription drug costs for clients, National Medical Health Card Systems Inc. is a tiny blip on the radar screen.

The pharmacy benefit manager, or PBM, boasts 2.5 million members. That's pocket change compared with the tens of millions managed by industry leaders such as AdvancePCS, Caremark Rx Inc. and Express Scripts Inc.

But while National Medical is a lot smaller than those firms, it does pretty much the same thing: helping health plan sponsors manage and cut the costs of prescription drugs.

The firm was even smaller until January, when it paid $40 million for Centrus, the PBM unit of Health Solutions Ltd.

Centrus' $270 million in revenue last year nearly equals that generated by National Medical in fiscal 2001, which ended last June. The deal almost doubled National Medical's membership count.

It also came at a time of financial recovery for National Medical, which has been working hard to make a comeback after losing a pair of major customers two years ago.