Tag Archives: trend management

Takeda: Prescription Drug Benefit Report

Have you ever read the annual Takeda Prescription Drug Benefit Cost and Plan Design Report?  It is a great summary of data from 340 employers representing over 6M members and this version is based on data from May and June 2007.

Here are my notes:

  •  89% use tiered formularies.  [I am amazed that 11% still have a one-tier plan.]
  • Closed formularies (where drugs not on the list aren’t covered at all) have almost disappeared.
  • 11.1% of employers use mandatory mail.
  • Mail order penetration with mandatory mail is 27.3%.
  • 26.8% of employers use retail pharmacies to dispense 60+ day prescriptions.
  • 51.5% of employers require use of a specific specialty pharmacy.  (mandatory specialty)
  • 40-70% of the specialty drug spend is under medical not pharmacy
  • Flat dollar copayments still represent about 75% of plan designs
  • The average copayments for retail are $8.91, $23.08, $39.77 and for mail are $17.99, $47.89, and $81.07.


  • It talks a little about using lower copayments to increase adherence:
  • The Cleveland Clinic has a plan outlined here where they dropped their statin copayments dramatically from $75 and $90 for 90-days to $6 for a generic and $8 for Lipitor or Crestor.  The drugs had to be purchased from the clinic’s pharmacies.  Additionally, the employee had to split the pills (i.e., get a Lipitor 40mg pill and split it to get two 20mg pills) except for those who required the highest doses.
    • 38% of eligible members participated
    • Adherence went up 20% in year one
    • 50% of those that participated picked up all their prescriptions in year one compared with 18% of those that didn’t participate
  • The average pharmacy reimbursement rates as a percentage off AWP were:
    • Retail brand 16.1%
    • Retail generic 43.6%
    • Mail brand 22.7%
    • Mail generic 51.8%
    • Specialty 16.5%
  • For most, they still show an average dispensing fee although I thought that was gone in mail for sure.  (It says only 20% pay a dispensing fee at mail.)
  • The brand rates seem pretty reasonable, but I think the generic rates are pretty pathetic.  I thought it would be more like 50% retail and 60% mail.
  • The GFR (generic fill rate) ranged from 4.7% to 71% at retail and 1.8% to 71.4% at mail.  (Note that your GFR at retail should be higher as their are more acute generics.)
  • The average GFR was 54.5% retail and 41.7% mail.


  • The copay differential between tiers one and three makes a difference…at least at retail (what about one and two?):
    • If it is $25 or more, the retail GFR was 4.9% more and if it was $65 or more at mai, the mail GFR was 0.6% less.
  • The averages for Rxs PMPM and costs were broken out by active employee and retiree:
    • Rxs PMPM were 2.1 active and 3.5 retiree
    • Gross costs PMPM were 76.15 active and 146.23 retiree
    • Net costs PMPM were $55.52 active and $122.99 (with highest being 401.32 and 359.00)
  • Rebates per branded Rx (actual not guaranteed) were:
    • $2.57 retail
    • $10.79 mail
  • There is another case study insert about the University of Michigan’s pill splitting program for statins (aka cholesterol lowering drugs).
    • Participants save 50% on copay and get a free pill splitter
    • 500 people participated saving them $195,000 and the patients saved $25,000 in copays
    • According to their director of benefits, if 25% of eligible statin users split pills, they could save $740,000 per year
    • So, they must have had about 6% participation in the year one savings above
  • I was actually shocked by the number of employers covering some OTCs (which I think is great).
    • 83.9% cover Prilosec OTC
    • 79.3% cover loratadine (Claritin)
  • 76.4% use some quantity level limits
  • 75.8% use refill too soon logic (I thought this would be 100%)
  • The classes most typically excluded from coverage


  • It lays out the most common UM (utilization management) tools used including:
    • Disease mgmt 30.5%
    • Dose optimization 22.6%
    • Outbound phone calls 17.9%
    • Step therapy 35.5%


  • And, finally, it gives a lot of links for more information which I will post in another entry.

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