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What
the Survey Reports
The 2007 survey captured the copayment and coinsurance amounts for
seven drug categories (Generics, Preferred Brands, Nonpreferred Brands,
Brands, Lifestyle, Nonformulary, and Specialty Drugs) for both retail
and mail prescriptions.
Because few employers provide a benefit for nonformulary drugs —
extending an employer’s negotiated pricing to members for noncovered
drugs — this report does not report such data.
However, in addition to providing the average amounts of copayments
and coinsurance, this survey does report the range, with low, median,
and high points. This should provide drug-benefit decision makers
with information they can use to set cost sharing amounts.
Overall Cost Sharing Trends
Employers establish drug plan designs to share some portion of drug
costs with the plan’s members. The cost shared is usually based
on an amount for each tier or drug category. In 2007, members paid
a greater percentage of retail costs than mail-service costs. On average,
members paid 25.2 percent of a retail prescription but only 19.4 percent
of a mail prescription. Table 9 illustrates the range of claim costs
paid by members.
The
Effects of Incentives
Historically, employers have created incentives for members to use
mail service by keeping mail-service cost sharing low relative to
retail cost sharing. Although mail-service drug costs are lower, those
incentives employers created to increase utilization resulted in mail-service
prescriptions costing employers more than retail prescriptions. Employers
learned that mail service will not produce savings for them unless
cost sharing is structured appropriately.
Now, average mail copayments are more than twice the amount of average
retail copayments … for generics, preferred brands and nonpreferred
brands. This illustrates that employers have effectively changed their
plan designs to realize savings from mail service.
In general, the survey data show employers are motivating members
to use generic drugs more frequently by increasing their copayments
for preferred brands and decreasing their copayments for generic drugs.
The average 2007 generic copayments have decreased 5.6 percent at
retail and 2.0 percent at mail. Meanwhile, since 2005, preferred-drug
copayments have shown an increase of 6.8 percent at retail and 14.9
percent at mail. Nonpreferred brand copayments have increased 1.4
percent at retail and 4.8 percent at mail.
Note:
This report’s Drug Cost
Highlights Section discusses increases in the dispensing of
generic drugs.
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