Balancing the cost of prescription drugs against the need for them has become a challenge for everyone in the health care system. Employers who pay for prescription drug coverage find they must choose between shifting more costs to employees and reducing the level of prescription benefits.
“Quite simply, people need access to affordable prescription drugs,” says James A. Giardina, RPh, M.S., regional vice president of Pharmacy Services for HealthAmerica. “As costly as it has become to provide coverage for prescription drugs, these medicines are usually an important part of medical care plans, both to treat illnesses short term and to help control chronic disease and improve health in the long term.”
Smart Business spoke with Giardina about what employers can do to manage rising prescription drug costs without sacrificing quality coverage.
Why are prescription drug costs increasing?
Partly it’s because more people are using more drugs. In many cases, it’s because newer and costlier brand names are being prescribed. Also, drugs are coming to the market priced more expensively than the drugs they are often replacing, and drug companies are spending more money to advertise to consumers. In addition, people are living longer, and sedentary lifestyles are creating more health problems.
What are some ways employers can keep the pharmacy benefit affordable for themselves and their employees?
Employers can take steps to help contain costs while ensuring that their employees are using medications more effectively.
- Use therapeutic equivalents. Therapeutic equivalents are drugs in the same or a related class that do the same job, often at a lower cost. For example, a patient taking 10 milligrams of Lipitor could get a comparable decrease in cholesterol with 20 milligrams of Zocor. So, a person could take Zocor in place of Lipitor and get the same outcome. In fact, if someone took simvastatin — the generic version of Zocor — instead, that person could save money, as well.
- Set quantity limits. Setting quantity limits works like this: One daily dose of the antidepressant Lexapro at 20 milligrams is as safe and effective as taking two Lexapro at 10 milligrams a day. One 10 milligram tablet costs the same as one 20 milligram tablet, so taking two 10 milligram tablets a day doubles the price of the treatment. This can unnecessarily drive up the cost of providing the medicine. Quantity limits promote appropriate and cost-effective medication use.
- Use formularies. A formulary is a list of prescription medicines that a health plan covers. Some drugs cost a lot of money, but the price of a drug does not necessarily correlate to its benefit. Formularies guide drug selection so that employers can be certain their employees have access to effective medicines, including brand-name and generic drugs, at a reasonable cost.
