As employee benefit budgets remain tight, employers are adopting plan design changes that reduce drug benefit coverage and improve pricing, according to the Pharmacy Benefit Management Institute.
“Employers are implementing prescription management approaches consistent with their strategy for overall medical benefits. As a result, the complexity of cost-sharing continues to grow driven by increased use of four-tier plans and coinsurance designs which require additional member education,” says Brenda Motheral, PBMI executive director.
The 2011 survey was completed by 274 employers and other plans representing 5.2 million members. Plans using a four-tier design increased from 17% to 25% between 2010 and 2011 and nearly 50% of large employers (more than 20,000 employees) now have a four-tier plan design. Within that four-tier design, specialty drugs are becoming more expensive for employees: Specialty copays increased by 37% in 2011 with the average specialty copays growing from $61 in 2010 to $84 in 2011.
“Specialty drug spending is increasing because utilization of these drugs is growing as specialty drugs are developed to treat new indications and also because the price of specialty medications, which are mostly brands, is growing at a significant rate,” says Motheral.
Further, the copay differential between tiers continues to grow. The average differential between generics and preferred brands copays was $16 in 2011, compared to $7 in 2000. The average differential between preferred and nonpreferred brand copays was $20 in 2011, compared to $13 in 2000.
To ensure that the copay differential does not completely or more than offset the price difference, “plan sponsors need to have a custom analysis completed based on their specific discounts and copay structures,” she says.
The growing complexity of plan designs, with a larger number of tiers and increased use of coinsurance, brings increased need for effective member education about cost-sharing, according to the report, "Prescription Drug Benefit Cost and Plan Design Report." A positive trend in this area is the increased availability of online resources, which allows for determination of copays and therapeutic alternatives prior to the dispensing of a medication. However, many employees need to be educated on these resources or might not otherwise use the savings.
“Coverage of generic drugs that are therapeutically equivalent and lower cost than the brand alternatives continues to be the most effective way to reduce the cost of drugs, both for the employer and for the employee,” says Motheral. “While the percentage of claims that are generics now averages more than 70%, the potential is nearly 85% so opportunity still exists.”
Other findings included:
* Nearly 60% of employers now cover 90-day supplies of maintenance medications at retail pharmacies.
* Most plans offer a greater copay discount for mail than for 90-day claims filled at retail.
* Specialty pharmacy networks are tightening: 30% of employers require specialty medications to be dispensed through their PBM's specialty pharmacy.
* 54% of respondents now exclude nonsedating antihistamines from coverage, likely reflecting the growing acceptance of over-the-counter promotion as well as continued budget pressure in the slowed economy.
