Rx for cost management Featured

5:36am EDT May 24, 2006
Prescription drug cost trends, while lower than in recent years, continue to represent a significant portion of national health care expenditures. Although generic drug use is at an all-time high, brand-name drugs still account for the majority of costs, with double-digit annual price increases being the norm.

To maintain control of pharmaceutical costs, benefits are being designed to ensure that the most cost-effective care is available without sacrificing quality of care. A variety of innovative pharmacy management techniques being used today may save your business money. Check your health care benefit provider’s pharmacy policies to see if you’re taking advantage of them.

Quantity limits
These represent the drug quantity allowed over a set time period of time, and are usually based on clinical evidence to take advantage of parity pricing (i.e., equivalent medication costs regardless of dose) or to conform to Food and Drug Administration(FDA)-approved dosing and current treatment guidelines.

Example A: Suppose one of your employees is taking the cholesterol-lowering drug Zocor with a dosage of one 20-mg tablet per day. Let’s say the employee’s physician would like to double the dose, and prescribes a 20-mg tablet twice per day. A quantity limit would mandate that, instead of prescribing two 20-mg tablets, the physician should prescribe one 40-mg tablet per day. Here’s the cost breakdown:

  • One 20-mg tablet daily, at $4.96/tablet = $148.80 monthly
  • Two 20-mg tablets daily, at $4.96/tablet = $297.60 monthly
  • One 40-mg tablet daily at $4.96/tablet = $148.80 monthly

As you can see by this example, the cost per pill remains the same, regardless of the dose. It therefore makes economic sense to prescribe the 40-mg tablet, if the dose needs to be increased. This arrangement is only implemented for drugs the FDA has approved for once daily dosing. The medical effectiveness remains unchanged.

Example B: Perhaps another employee is having trouble sleeping and is prescribed a sedative, such as Ambien, 30 tablets, to be taken once nightly. Because insomnia is often secondary to another condition (e.g., depression, anxiety, etc.) current clinical guidelines do not recommend chronic use of sedatives to treat insomnia. The plan, therefore, may allow a lesser quantity, such as10 tablets per 30 days.

Prior authorization
Prior authorization requires that the health plan have an opportunity to review and approve certain medications before a prescription can be filled. This practice has multiple benefits, not the least of which is protecting member health. It also helps control costs by ensuring proper prescribing practices.

Medications subject to prior authorization are generally very costly, or potentially have serious complications or interactions if not taken properly. In addition, prior authorization is often required for medications that are prescribed for off-label uses — which occurs when a drug is FDA.

The concern with off-label dosing is that physicians usually have few or no clinical studies to use as guidance, and patient safety may be an issue. The practice of off-label prescribing may be justified in exceptional cases, and prescribers are usually asked to submit detailed clinical rationale with their request.

Step therapy
Step therapy is a viable approach when there is more than one drug used to treat the same condition and none of the drugs has been proven to be clinically superior to the others. When this situation occurs, it makes sense to require that the least expensive drug (often a generic) within the class be used before other drugs in the class. Generic drugs, which have the same active ingredients as their brand-name counterparts, often have a much longer track record of safety than newer, branded drugs available to treat similar conditions. Current examples of step therapies include the use of Prilosec OTC ($15/month compared to Nexium at $150/month), which is used to treat forms of heartburn like GERD. Another example would be the use of generic antidepressants like fluoxetine before the use of brand name product like Lexapro. The cost difference is $40 per month: fluoxetine is $15 compared to Lexapro, which is $55.

Your prescription
Managing your pharmacy costs will be most effective by incorporating a combination of all of these pharmacy strategies with one additional element — employee education. When people understand the rationale for these approaches, it helps them realize that saving money and improving health don’t have to be mutually exclusive. When it comes to pharmaceuticals, the aforementioned approaches not only save money, they help ensure we all receive the most medically effective, safest care.

STEVE MARCINIAK is director of pharmacy services for Care Choices, a nonprofit health care organization and a subsidiary of Trinity Health. Care Choices HMO is ranked No. 12 among 257 commercial plans nationwide and is the top-rated plan in Michigan, according to U.S. News & World Report/NCQA “America’s Best Health Plans, 2005.”