2 Obstacles to Managing Drug Costs (Video)

To Manage Employer Prescription Costs, Get the Right Drug for the Right Condition

Employer Prescription Costs

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Zafeira Sarrimanolis, MedCost Pharmacist and Clinical Consultant,knows the value of reviewing pharmacy usage patterns for clients, to identify opportunities to contain costs.

“From a more clinical perspective, the key to managing drug costs is making sure that the right people are using the right drug for the right medical condition,” she said.

Obstacle #1: Not Adhering to the Formulary

“What is a formulary?” asked Michael Cornwell, Director of Sales and Underwriting. “A formulary is a guide that the Pharmacy Benefit Manager puts out that says these brand drugs are the preferred versus the non-preferred versus generics.

“For example, the average cost of a generic today is about $28-$29. The average cost of a brand drug is probably in the $167 range.

employer prescription costs“Members do not always know what drugs are on the formulary,” said Ms. Sarrimanolis. “Certainly their providers don’t always know what drugs are on the formulary, so that’s where some of the confusion and disruption comes from.

“We try to fill a lot of these gaps through member education. Pharmacy Benefit Managers do a great job of outreaching to members through the mail, emails and on their websites. Unfortunately, members might not always understand that information.

“What we need to do is to encourage members to become smarter consumers and to make the best, most cost-effective choice for their own medication.”

The Pharmacy Benefit Manager’s Role

employer prescription costs

“A Pharmacy Benefit Manager, or PBM, serves multiple purposes,” Mr. Cornwell said. “One purpose is to process all the pharmacy claims. By doing that, benefits administrators like MedCost are able to collect the data and analyze it.

“Zafeira, as our pharmacist on staff, and our Care Management teams know what usage patterns are. We know what kinds of drugs people are taking.

“The PBMs certainly are negotiating discounts at the drugstore and contract rates for us to get the best prices that we can for the drugs that we take. PBMs can also provide data on clinical reasons to manage those drugs and make sure that they’re the most appropriate and cost-effective.

Obstacle #2: Not Educating Members

“One of the largest reasons that people are readmitted to the hospital is because they don’t adhere to directions to take their medication.

“Programs like step therapies ask: ‘Have you tried this drug before you try that one?’

“Prior authorizations ask: ‘Why do you need this drug?’ For example, you must have the proper genotype to be able to take certain treatments for Hepatitis C.

employer prescription costsPrior authorizations cause a lot of disruption to the member. You go to the doctor for a prescription.  You go to the drugstore and they say why do you need to take this drug? And you go back to your physician but they’re busy. It takes time, so it’s all disruptive at a time when you want your medication. It’s hard to understand.

Member education is extremely important. It would be nice if we could fill that gap to where physicians knew exactly what your formulary was at the point that physicians are prescribing that medication. Right now that doesn’t exist.

“Every 1% increase in generic utilization results in about 1.5% savings,” said Michael Cornwell.

“In drug costs, it becomes pretty significant. As Zafeira said, as the drug manufacturers continue to make more drugs (which is a good thing), it puts more challenges on us to make sure that the drugs are appropriate and cost-effective.

Using PBM Websites to Shop Employer Prescription Costs

employer prescription costs“We’re going to go through more disruption as a result of that. We’re going to have to get used to it. But there are a lot of new tools coming on the marketplace to try to help people shop for drugs,” Mr. Cornwell observed.

“The PBMs have websites where you can log in under your personal account with your PBM that is administering your drugs. You can put in the name of the drug and the details; and it will show you the best places the most price-competitive places, to buy that drug. It will also match up what your formulary is and if there are alternatives that are cheaper than the drug you have.

“The bigger issue is helping people to understand to be shoppers.”MedCost

(This post is a transcript from the video, “2 Obstacles to Managing Drug Costs.”)

employer prescription costs

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