Enabling Healthy Decisions

Takeda publishes The Prescription Drug Benefit Cost and Plan Design Survey Report (free to order here). I read the 2006 edition last night. It is full of great data that I would want if I were a consultant, a HR representative, or responsible for my companies PBM relationship.

The document also points you to the American College of Occupational And Environmental Medicine for other information.

Here are some of the facts (based on respondents to their survey):

• 69% of employers less that 5,000 employees are self-insured
• 97% of plan sponsors chose to be self-insured so that they had the ability to customize their health plan to meet workforce needs
• 68% of employers use separate vendors for medical and pharmacy of which 53% use a PBM
• Average pricing was:
  • $1.88 in retail brand dispensing fees
  • 84.7% AWP reimbursement for retail brands (or AWP – 15.3%)
  • $0.24 in mail brand dispensing fees
  • 78.1% AWP reimbursement for mail brands (or AWP – 21.9%)
• Formularies were used by almost everyone – 92%
• Mail copayments were roughly 2x the retail copayment (for 3x the supply of medication)
• Employer size appeared to matter for price negotiations (no kidding) and they showed that employers w/ over 20,000 members achieved a retail rate of 0.8% less that employers with less than 2,000 members
• Sponsors who use mandatory mail got a lower reimbursement rate (77.1%) than those without mandatory mail (78.4%)
• Only 2% of sponsors use a closed formulary where drugs not listed are not covered and the patient pays the cash price
• It cites research on adherence (The Importance of Medication Adherence, Stambaugh, April 2006) which showed the following reasons for poor medication adherence:
  • 1% don’t know how to use the drug
  • 10% can’t get the Rx filled, picked up or delivered
  • 14% don’t think they need the drug
  • 17% said the drug costs too much
  • 20% don’t want the side effects
  • 24% sometimes forget to use or refill the prescription
  • 10% cited other reasons
• 40% of employers who design their own plans use co-insurance as opposed to 13% of people who use other parties (i.e., consultant or managed care)
• Mail service utilization ranged from 0.2% to 62% with 18.3% being the average
• If a company had mandatory mail, their mail use was 32% versus 14% if voluntary mail
• Generic dispensing rates ranged from 33% to 71% (51% average) at retail and 12% to 65% (39% average) at mail – which is due to the different mix of acute versus maintenance drugs typically
• Talked about specialty drugs quoting cost to treat MS at $12K per year and hemophilia at $120K per year (Rx only)

Lots of good information to have.