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 or 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 Health-America. “These medicines are usually an
important part of medical care plans, both
to treat illnesses short-term and help control chronic disease and improve health in
the long term.”
Smart Business spoke to 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. 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 several steps to help
contain costs while ensuring that their
employees are using medications more
effectively.
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 mg of Lipitor could get a comparable
decrease in cholesterol with 20 mg of
Zocor. So, a person could take Zocor in
place of Lipitor and get the same outcome.
In fact, if they take the generic version of Zocor (simvastatin) instead of brand
Lipitor, they’ll save money as well.
Quantity limits. Setting quantity limits
works like this: one daily dose of 20 mg of
the antidepressant Lexapro is as safe and
effective as taking two 10 mg Lexapro a
day. One 10 mg tablet costs the same as
one 20 mg tablet, so taking two 10 mg
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.
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.
Are generic medicines living up to their
promise of lowering prescription drug costs?
Using generic medicine is an excellent
way to save money. Generic drugs typically cost 25 percent to 90 percent less than their brand-name equivalents. According
to an analysis done by the Consumers
Union and Consumer Reports Best Buy
Drugs (www.crbestbuydrugs.org), taxpayers could save $8.2 billion in 2007 if
Medicare Part D beneficiaries were prescribed generic statins to reduce cholesterol rather than the brand-name drugs.
What other prescription drug benefit strategies can employers use?
Pharmacy costs can be effectively managed through benefit plan designs that provide financial incentives for using less costly generic and preferred brand-name drugs.
Multitiered drug benefits using different
flat dollar copayments require employees
to pay higher copays for brand-name drugs
or drugs that are not on the formulary.
Some tiered drug benefits also use percentage copayments, or coinsurance,
where employees pay a percentage of the
cost of the drug, rather than a flat dollar
amount. Both benefit designs oblige people
to have a bigger financial stake in the
process, so they tend to get more involved
in finding affordable and effective drugs.
Any other suggestions?
Encourage employees to educate themselves on their diseases and drug therapy
treatments. They should also talk to their
doctors about alternative treatments.
Sometimes we can avoid taking medication altogether by changing a lifestyle habit
or doing something differently. For example, doctors often find that when patients
change their diets or use the right over-the-counter medications, mild heartburn may
be controlled without using expensive proton-pump inhibitors (PPIs).
Employers should also support employees in leading healthy lifestyles. The more
health problems a person has, the more
medication he or she will use. Therefore, it
makes sense to help your employees lose
weight, quit smoking and make other
healthy lifestyle choices.
For more information from the FDA, visit www.fda.gov/cder/
consumerinfo/DPAdefault.htm.