As companies buckle down to lower their health insurance costs, the availability of customized pharmacy management has given employers another way to save.
“Pharmacy is an integral part of the management of any medical condition,” says Michelle Dittrich, manager of pharmacy operations for SummaCare, Inc. “As such, an integrated approach to both medical and pharmacy benefits is essential in not only promoting effective treatment, but also in lowering costs.”
Smart Business spoke to Dittrich and Tracy Dankoff, Pharm.D, director of clinical pharmacy for SummaCare, Inc., about the role that effective pharmacy management plays in lowering overall health insurance costs.
What is integrated pharmacy management (PM)?
Integrated pharmacy management offers a way to manage a prescription drug plan. This includes setting up a network of pharmacies and working with employers in determining the most appropriate prescription drug plan for your work force. PM may feature utilization management programs aimed at managing costs such as step therapy, prior authorization and/or quantity limits for specific medications.
PM also includes developing the prescription drug formulary (a list of drugs covered by a health plan) and the copay for each drug. For each pharmaceutical category, a formulary shows the copays of medications — usually broken down by brand names versus generics and then placed into cost tiers.
The formulary not only assists physicians as they prescribe, but also educates patients on what they will pay out-of-pocket for the drug prescribed. You should take a copy of the formulary with you to your doctor so you can work with your doctor in determining the most appropriate drug options for your condition.
PM uses the expertise of physicians as well as pharmacists in developing a formulary. Many PM programs offer customized formularies based upon an employer’s needs. A truly integrated PM program will work with the employer in ensuring that employees have access to the appropriate drugs for their needs and are using these medications properly.
In addition, integrated PM programs benefit your work force by analyzing a patient’s overall condition, which helps ensure not only a drug’s effectiveness, but also that the drug will not cause adverse reactions with any other ongoing treatment.
What should employers know about generic drugs?
One of the best ways to save costs is to utilize generic drugs versus costly brand name drugs. In 2008, generic drugs accounted for almost 60 percent of all prescriptions filled nationally. There are very few drugs that don’t have a generic equivalent — even many big-ticket drugs now offer generic alternatives. Given the right benefit design, employers can expect to see their generic utilization rates to be close to 70 percent in 2009.
Many PM programs are promoting the use of generic drugs by offering a 90-day supply of generic drugs at retail pharmacies for a very low copay. This convenience and low cost has proven effective in steering people towards generics. In addition, it encourages people to have their prescriptions filled at network pharmacies using plan coverage. This is very important in allowing the PM program to manage the patient’s overall condition. If a prescription is filled ‘outside’ of the plan (for example, many grocery store chains offer generic prescriptions for a flat retail fee — not using any insurance coverage), a PM program is not able to track utilization and possible drug interactions and duplications. This is counterproductive to effectively managing conditions and costs.
It’s important for employers to continually reinforce the benefits offered by their prescription plan and work with their PM program to adopt new programs that are both member-friendly and cost-effective.
What about high-cost drugs that may not have generic alternatives?
Many expensive self-injectable drugs, also known as specialty drugs, are driving pharmacy costs up. These include drugs used to treat multiple sclerosis, rheumatoid arthritis and some forms of cancer. Although these drugs are high-cost, they are extremely effective — which stresses the importance of utilizing a PM program to manage the distribution of these drugs. Although expensive, the appropriate utilization of these specialty pharmaceuticals can have a positive impact on your overall medical expenses.
How can employers keep employees informed about their pharmacy benefits?
Communication is very important when it comes to pharmacy programs. Employers need to work with their health plans throughout the year to let members know about any formulary changes and/or the availability of new medications.
Health plans typically post formularies on their Web sites and distribute this information annually to their members. It’s key that employees are aware of this. Choose a plan that offers your employees a Web site with an interactive formulary where they can look up a drug they’ve been prescribed and find out what the copay is or if there are any restrictions on the use of that drug. They can also view changes to the formulary and learn about impactful changes to specific drugs or if they become available as generic. A member portal where employees can view their personal claims information for prescription and medical claims provides members a snapshot of their medical care up to that point.
Employers can reinforce this information by reminding employees to check the plan’s Web site periodically.
Communication with physicians is just as important. Employees should work with their doctors in choosing drugs that best suit their needs both financially and for effective treatment of their conditions.
Michelle Dittrich is the manager of pharmacy operations for SummaCare, Inc. Reach her at [email protected].
Tracy Dankoff, Pharm.D, is the director of clinical pharmacy for SummaCare, Inc. Reach her at [email protected].
SummaCare, Inc., a provider-owned health plan located in Akron, Ohio, services members in an 18 county service area through a network of over 7,000 providers and many top hospitals.
