Protecting Drug Plan Tools that Promote Safety and Control Costs

Josh Bindl  •   September 6, 2017  •   1 Comment

Prescription drugs are a big business. While prescription medications are vitally important to individuals, the companies that produce them invest a lot of time and money to bring their product to market. Pharmaceutical companies continue to increase budgets to both grow the market for their medications and protect the market penetration they have already achieved.

Protecting Revenue

One way pharmaceutical companies are working to protect the annual revenue numbers their drug has achieved is to limit the tools plan sponsors employ to control costs.  State by state, pharmaceutical companies are working to limit, or even ban, the tools plan sponsors and PBMs use to promote the use of the most cost-effective (yet clinically appropriate) medications. This effort is under the guise of giving patients and their doctors options. CVS Health recently detailed these activities; their release can be read here.

Advertising to Doctors and the Public

Doctors often get information through the pharmaceutical representatives who come to their office to pitch expensive medications. These same pharmaceutical companies also spend big money on direct-to-consumer advertising to get patients to request these expensive medications from their doctor. The result is prescriptions are written for higher-cost drugs which may not provide any additional value.

Fighting Back

The tools created by PBMs and used by plan sponsors to control costs are formed on evidence-based guidelines, developed by teams of doctors and pharmacists, using research on drug efficacy and clinical appropriateness. They analyze the market to find the highest value medication available to treat each condition. Examples of tools that PBMs and plan sponsors put into place include formulary exclusions, step therapy, and the promotion of generic utilization.

Plan sponsors and PBMs implement these tools to ensure their plan participants are using the most cost-effective medications on the market. The pharmaceutical pipeline is full of exciting treatments expected to improve and/or extend the life of people suffering from chronic conditions. These drugs are welcome breakthroughs, but many come with extremely high price tags. Without tools to drive the use of the highest value treatments, employers may be forced to cut the benefits that provide coverage in the first place.

Legislation in Your State

If legislation in your state surfaces and threatens to limit the benefit tools you have in place, National CooperativeRx is ready to help. Our team can assist by providing resources, supplying talking points, or drafting a letter to be shared with your elected officials.