How are you maximizing your opportunity to control pharmacy spend?
Health Insurance plan sponsors are becoming more aware that working closely with their Pharmacy Benefit Management (PBM) partners is more important than ever. When medication patents come to an end, generics begin emerging; presenting a great opportunity for plan managers to work closely with their PBM to update formularies in an effort to control medical spend.
Per EBN, “10 high-cost drugs losing patent protection in 2016” and Truescripts PBM, here is some information pertaining to some of the drugs that are going to be experiencing patent expirations this year:
| Medication | Purpose | Generic Approved |
Monthly Cost Est. |
| Humira | Rheumatoid Arthritis | Biosimilars in the pipeline; no generic approved | $4,000 |
| Crestor | Lower bad cholesterol (LDL), raise good cholesterol (HDL) | N/A | $250 |
| Benicar | High blood pressure | N/A | $220 |
| Seroquel XR | Schizophrenia and bipolar disorder | N/A | $500 |
| AcipHex Sprinkle | Acid reflux, ulcers | November 2013 | $500 |
| Epzicon | HIV | N/A | $1,317 |
| Kaletra | HIV | N/A | $750 |
| Norvir | HIV | January 15, 2015 | $260 |
| Ambisome | Anti-fungal medicine | N/A | $185 |
Nathan Gabhart, Founder and CEO of Truescripts PBM, stated, “during the first 6-9 months (that a medication patent expires) these drugs become a single source generic, and will have about a 20% lower cost. After 9 months, they typically go multi-source; meaning anyone can make it, and the price drops 80-90%.” So, this is savings that both plan members and the plan itself can benefit from if managed appropriately.
How firms can use this information to mitigate Member and Plan expenses
Information is great, and the insurance industry does not lack in abundant information, but WHAT do you need to do with it, and what can be done to help with health insurance costs reduction?
- Partner with your broker and PBM to structure formularies that encourage its members to see the incentives of first seeking alternative generic medications. If you have a good PBM, they will work with your plan members to identify these alternative medications. We have found that Truescripts PBM does a great job in this department.
- Ensure that your PBM partner is structuring your formulary program in an effort to maximize Rx company rebates that are available. The subsidies available from the Rx companies can be MASSIVE, saving the Member(s) a load of money as well as the Plan.
- Educate Members on the importance of seeking brand generics as alternatives, and to consult with their medical professionals on the effectiveness of utilizing alternative medication.
Feel free to post your thoughts/comments, or reach out to discuss further.
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