How to pick the right pharmacy plan for your business

As with health plans, there are a lot of pharmacy plans to choose from these days, and they all think they’re the best, says Chronis Manolis, RPh, vice president of Pharmacy Services in the UPMC Insurance Services Division, which is an integrated partner company of UPMC Health Plan.

Go big — it’s more economical!

Go small — it’s more customizable to your organization!

Go pharmacy-only carve out — we’re the experts!

Go pharmacy-plus-medical plan — we’re more comprehensive!

“As we say, it’s noisy out there,” he says.

Smart Business spoke with Manolis about six recommendations that will help you decide which pharmacy plan is best for your company and your employees.

1. Look for a large player

This really just comes down to the influence over purchasing power that larger plans have.

For example, larger plans are better able to negotiate drug discounts with pharmacy benefits managers (PBMs) such as Express Scripts Inc. In these cases, when a pharmacy company goes to a PBM with 50, 500 or even 5,000 lives, that company has far less leverage to obtain discounts on its drug costs than if the pharmacy company covers 500,000 lives.

2. Look for a pharmacy plan that is integrated with a medical plan (i.e. not a ‘carved-out’ pharmacy plan)

If your medical and pharmacy insurer is one and the same, this entity will know your employees better. It manages their overall health including medical and pharmacy claims and understands the impact of drug on overall costs.

Integrated plans have programs that allow for comprehensive ‘whole-person’ management.

Additionally, having access to both medical and drug claims data enables enhanced analytics to highlight opportunities to improve quality and lower overall costs.

3. Look for a formulary (list of covered drugs) that receives independent medical oversight

The best pharmacy plans include independent oversight committees of pharmacists and physicians that continuously update their formularies based on new products, new evidence and market trends.

4. Look for a formulary customized to your market

Some formularies are created using national demographic and drug trend data. Problem is, this national ‘data’ may or may not apply locally.

5. Look for a multitiered formulary

This makes it far easier to influence drug selection and control costs, including the extremely high cost of specialty drugs.

6. Look for a player that has an aligned and comprehensive strategy to manage members on specialty drugs

Specialty drugs are high cost, injectable or oral drugs used to treat rare and chronic conditions.

It’s projected that specialty pharmacy costs will drive 50 percent of all pharmacy costs by 2018, and yet involve only 1 to 2 percent of your members.

By finding a pharmacy plan that takes a holistic, ‘whole-person’ approach to members on these specialty drugs, it will promote cost effective, high quality care not just for your drug costs but for your overall health care costs.
These strategies will help you better plan for and contain your pharmacy costs.

The right pharmacy plan and formulary will also help guide your employees to the right drugs that are both affordable and appropriate.

Insights Health Care is brought to you by UPMC Health Plan