Effective drug benefit plan designs address a myriad of variables
in addition to how much is paid for each prescription.
These variables are discussed below.
Formulary
A formulary is a list of drugs covered by a prescription drug
plan. The survey question about formulary structure reflects
the range of formulary options prevalent in the marketplace.
This year 89% of respondents using a formulary have it
structured with multiple tiers as shown in Figure 3. Closed
formularies have almost disappeared, replaced by formularies
with multiple tiers that require members to pay more for
more expensive drugs instead of limiting access to therapies.
Closed formularies do not cover drugs not included on the
drug list.
Mail-service Pharmacy
A total of 93.7% of employers offer access to mail-service
pharmacy to supply maintenance medications used to treat
chronic conditions. Only 12.4% of employers require maintenance
medications to be dispensed by a mail-service
pharmacy, commonly referred to as “mandatory mail”. There
is little change in mail-order strategy since 2007. Less than
a third, or 31.4%, of employers use retail pharmacies to dispense
maintenance supplies of medication. For a second
year, 60% of employers using retail pharmacies to dispense
maintenance supplies are not restricting dispensing to select
pharmacies.
Transparency
About half, or 52.3%, of employers perceive the nature of
the financial relationship with their PBM to be transparent,
which is a modest increase over 2007 data. A total of 13.1%
of employers did not know if their PBM financial relationship
was transparent. This survey question addresses the employer’s
perception of transparency; it does not capture any pricing
information.
Benefit Limits
Drug-specific annual deductibles, maximum annual benefits,
or out-of-pocket limits are not included in the majority of
employers’ plan designs. When used, the most commonly
adopted features are a drug-specific annual deductible used
by 17.6% of employers and a drug-specific out-of-pocket
limit used by 14.6% of employers. Only 3.5% of employers
have a drug-specific maximum annual benefit.
- The median drug-specific annual deductible is $50 for
single and $105 for family. A deductible is the amount a
plan member pays before the plan pays for prescriptions.
- Median drug-specific out-of-pocket limit is $1,500 for
single and $2,800 for family. An out-of-pocket limit is
the total amount a member must pay for prescription
drugs in a 12-month period.
- Median maximum annual benefit for drugs is $5,000 for
single and $9,000 for family. A maximum annual benefit
is the total amount a plan will pay for prescription drugs
in a 12-month period.
Consumerism
Only five employers responding to the survey have a consumer-directed health plan, with a high dollar deductible for
specific drugs. This does not represent an increase in these
types of drug plans since 2007.
Specialty Pharmacy
While 73.9% of employers offer a specialty pharmacy benefit,
a detailed review of the cost sharing data supplied by employers
indicates that specialty cost share amounts typically fall under
the preferred or nonpreferred brand amounts. There do not
appear to be any major changes in distribution channel management
since 2007 as shown in Table 9.
Retiree Coverage
Almost half, or 47.2%, of employers are providing retiree drug
coverage. The retiree drug subsidy program is the strategy of
choice for 63% of the employers with retiree coverage as
illustrated in Table 10. Nearly a third, or 31.5%, offer group
coverage through a Prescription Drug Plan. The difference in
retiree coverage options for 2008 is most likely to represent
the choices of the larger group sizes responding as opposed to
any significant strategy shift in the marketplace.New Medicare
legislation may expand the number of Part D covered drugs,
as discussed in the Executive Summary.
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