Humana is phasing in a four-tier formulary that categorizes prescription drugs by costs, rather than generic or brand status. The higher the drug's acquisition cost — regardless of whether it's a branded or generic product — the higher the tier it lands in. The MCO says the structure gives it more flexibility to manage pharmacy costs.generic product — the higher the tier it lands on. The HMO, which is testing the new model with its small-group customers in Wisconsin, says the structure gives it more flexibility to manage pharmacy costs.
The thinking is this: Some branded drugs for people with chronic illness are relatively inexpensive, and a lower copayment could encourage more people to stay on their medications. More, Humana hopes to encourage members to talk with their doctors about lower-cost alternatives when they are prescribed third- and fourth-tier products. It recasts the copayment as a variation on coinsurance, and gives patients a greater financial incentive to consider therapeutic options.
The fourth tier would be reserved for biotech and gene-therapy drugs, for which members would pay 25 percent coinsurance.
It's only speculation, but if Humana's system catches fire, it could force pharmaceutical companies into competing on price to attain better formulary status.