Introduction
In
2007, the Pharmacy Benefit Management Institute (PBMI) conducted
its annual drug benefit plan design survey of U.S. employers in
May and June.
340
employers — representing 6,187,724 members — completed
the survey. PBMI expanded the survey’s questions this year
to collect new data on such issues as cost sharing and utilization.
Online
Resources
Because
the 2007 survey generated far more data than did previous surveys,
we’ve created these supplemental, online resources.
We've provided this online information to make it easier for employers
and other plan sponsors to access and use the report’s findings
while planning their benefit programs.
Takeda Pharmaceuticals North America (TPNA), Inc. has underwritten
the development of these online resources.
Key Findings
»
Employers establish drug-plan designs to share some portion of drug
costs with members. The amount shared is usually based on each tier
or drug category.
» Members paid a greater percentage of the costs of retail
prescriptions than the costs of mail-service prescriptions. On average,
members paid 25.2 percent of a retail prescription, but only 19.4
percent of a mail prescription.
» The average copayments that members paid for prescriptions
they obtained by mail are now more than twice the average copayments
they paid for the generic, preferred brand and nonpreferred brand
drugs they obtained at retail. This shows employers have effectively
changed the designs of their benefit plans to realize savings from
mail service.
» Employers have created a greater incentive for members to
use generic drugs. They’ve done this by decreasing member
copayments for generic drugs and increasing member copayments for
preferred brand drugs.
» In 2007, the average copayment members paid for generic
drugs decreased 5.6 percent at retail and 2.0 percent at mail. Since
2005, their copayments for preferred brand drugs have increased
6.9 percent at retail and 14.9 percent at mail. Their copayments
for nonpreferred brand drugs during that time increased 1.4 percent
at retail and 4.8 percent at mail.
» 75.3 percent of the employers said they use plan designs
with three or more tiers. The most common cost sharing approach
(shown below) is a three-tier plan design (generics, preferred brands
and nonpreferred brands) with dollar copayments.
» Both the negotiated AWP prices and the dispensing fees for
retail-brand and generic prescriptions continue to decline. AWP
discounts for mail service also are declining. The average retail
and mail pharmacy reimbursement for brand-name drugs has declined
0.8 percent since 2005, when we last collected such data.
» The average annual increase in drug costs reported by employers
in 2007 was 6.9 percent. The range of drug cost savings was .01
percent to 21.10 percent, while the range of cost increases was
.01 percent to 50 percent. This range is broad because of the varying
sizes, plan designs, and clinical programs that survey respondents
are using.
» Employers are using a broad range of utilization management
tools for all diseases. 76.4 percent of employers said they use
quantity limits across all disease states; 75.8 percent said they
use refill too soon supply limits.
Implications
of Findings
Employers are keeping the average rate at which their drug costs
are increasing to 6.9 percent. That is the lowest average rate of
cost increases since PBMI began this survey in 1995. It also represents
a decline of 0.6 percent from the 2005-06 survey.
The 2007 survey found that employers are using many tools to control
their prescription drug expenditures. These include:
- multi-tiered
formularies linked to cost sharing structures that encourage use
of the lowest-net-cost drug,
- incentives
for dispensing generics,
- negotiated
discounts off of drug ingredient costs and pharmacy services,
- coverage
of over-the-counter drugs, and
- a
broad range of approaches to utilization management
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