OBJECTIVES:  A large retail employer implemented Mercer‘s Dx-Rx PairingTM program.  This program offers reduced copayments on diabetes, coronary artery disease, heart failure, and asthma medications with concurrent enrollment in disease management.  We measured adherence and assessed medical utilization in 771 program enrollees (intervention group) and in those eligible but not enrolled (control group, n=997).  METHODS:  Adherence, defined by Proportion of Days Covered (PDC), was calculated using incurred prescription drug claims one year before and 6 months after implementation of Dx-RxTM.  Paired t-test analysis compared the change in adherence pre- vs. post-implementation in both intervention and control groups.  We calculated propensity scores to adjust for selection bias and subsequently used regression analysis to compare the change in adherence between groups. RESULTS:   The overall adherence in the intervention group increased by 7% (p<0.001) after implementation of Dx-RxTM, whereas the overall adherence in the controls decreased by 9% (p<0.001).  Adherence improved especially for inhaled steroid use among Dx-RxTM asthmatics (46%, p=0.011).  However, adherence among diabetics to angiotensin-converting enzyme inhibitors (ACEIs) and angiotensin receptor blockers (ARBs) did not improve in either the intervention or the control group (-2%, p=0.509; -8%, p=0.002, respectively).  Regression analysis concurred that Dx-RxTM enrollees had a greater improvement in PDC than the controls (β=0.094, p<0.001).  Larger increases in both prescription and medical per member per month (PMPM) costs were also seen in Dx-RxTM enrollees. CONCLUSIONS:   The Dx-RxTM program improved adherence, but did not reduce medical costs in this timeframe.  Subanalyses revealed areas of the program’s success and areas for improvement.