Managed Care

Employers identify strategies to reduce pharmacy costs

Which plan designs and strategies do employers feel are the best at reducing pharmacy costs? Respondents to a survey sponsored by the Pharmacy Benefit Management Institute (PBMI) identified potential strategies from “eliminating fraud, waste, and abuse” to “increasing member cost share.”

Of the five strategies suggested, employers felt that “aggressive formulary management” would be most effective, followed by “implementing utilization management programs.” But the differences were minimal.

When employers were questioned about the effect of industry forces, there was greater dispersion in ratings. The availability of new generic agents was thought to have the greatest effect. The lowest-rated industry force was thought to be direct contracting with retail pharmacies.

Employers that participated averaged 21,340 members in 2011. This compares to an average of 9,736 in 2010, a reflection of the decrease in participation by small employers and perhaps a reflection of less-generous medical benefits at small employers.

Survey results from 2010 and 2011 are not strictly comparable, however, because in 2010, 54 percent of respondents were employers with 4,000 or fewer covered lives, compared to only 44 percent in 2011. The survey had a total of 274 U.S. respondents, representing 5.2 million covered lives. But not all respondents provided their group size, so the estimated number of members represented is 6.7 million.

The survey collected information on drug plan design and utilization for prescription drugs dispensed through retail, mail-service, and specialty pharmacy distribution channels.

Strategies for reducing pharmacy costs — how effective?/Effect of industry forces on pharmacy benefit plans

Source: Pharmacy Benefit Management Institute, “2011–2012 Prescription Drug Benefit Cost and Plan Design Report”

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