2008 Outstanding Directors

In 2002, Prime Therapeutics, LLC, was a modestly sized pharmacy benefit management (PBM) company intent on wrangling market share from several well-established giants. It had a new president and CEO, Timothy Dickman, a new board chairman, Dr. Mark Banks, and a new game plan.

The Eagan-based company, founded in 1987, had been successful before Dickman joined it: “I think it was poised to do some really exciting things. I saw a great opportunity, and the company had great potential.” But he says Prime Therapeutics might have self-destructed if not for Banks’s leadership.

The new game plan was this: Focus the company on serving Blue Cross and Blue Shield organizations nationally. Today, 10 nonprofit Blue Cross plans share ownership of Prime Therapeutics, and their collective millions of members comprise the majority of Prime’s customer base. But Prime also broadened its services beyond negotiating favorable rates from pharmaceutical manufacturers for insurers and individuals. The firm also developed call-center capabilities and a national mail-order prescription business to give better support to its customers. “We became a full-service PBM, not just one that was doing a slice of the business,” says Banks, who first joined Prime’s board in 2000, when he took over as CEO of Blue Cross and Blue Shield of Minnesota, one of the company’s founding owners.

The results have been staggeringly positive. Prime Therapeutics has sustained year to year growth of 40 percent, which hoisted its annual revenues from $35 million a few years ago to $1.2 billion now. Prime’s employee base during Banks’s tenure has swelled from 135 to about 2,000, and its customer list has ballooned from 4 million to 16 million.

“We’re now probably the sixth or seventh in size of PBMs” nationally, says Banks, whose service as board chair, but not director, ended in 2006. “We’ve gone from being, essentially, a curiosity to a real contender in a very short period of time, and we still have a lot of head room for growth.” But the achievement wasn’t just growth, it was overcoming the pitfalls of growth.

“Companies go through these huge growth spurts, like bottle rockets, and then they tend to crash—burn out,” Dickman says. “There are infrastructure issues around technology, which probably gets back to capital and access to capital. There are human-capital challenges. And then there are just the core business-process issues around serving clients and making sure that as you grow, you’re not leaving existing clients behind.” Dickman adds, “Mark has been very instrumental during a stretch of hyper growth that we’ve had.”