By Ritu Malhotra, vice president and clinical pharmacy consultant, The Segal Company
Four critical programs can produce cost savings for prescription drug plan sponsors and participants. Here is an overview of each.
Mandatory Generics
A mandatory generic plan design provision is an important first step to help plan sponsors manage prescription drug costs by encouraging the use of lower-cost drugs.
This plan design provision typically impacts less than 5% of all prescription drug claims and therefore creates minimal disruption on the members. If the member chooses to take the brand drug when the generic equivalent is available, the member will pay their co-pay/coinsurance plus the cost difference between the brand and its direct generic equivalent.
Most states require that the pharmacy automatically substitute the direct generic, but the member and/or the prescriber can request that the brand be dispensed. This is known as a DAW, or dispense as written, rule.
A mandatory generic provision can be set up to exclude penalizing members who have a prescription indicating that the prescriber has requested the brand drug. Allowing this exclusion, however, typically leads to the members requesting their prescriber to make the DAW indication on the prescription; thereby making this provision less effective.
There is substantial clinical evidence to suggest that generic equivalent drugs work equally as well as their brand counterparts, so this plan change is typically associated with minimal complaints from the membership.
Prior Authorization
A prior authorization is designed to ensure that members are receiving the appropriate medication based on clinical criteria and alternative, lower-cost drugs available to treat their condition. These are extremely effective cost-savings clinical programs that can ensure that members are only utilizing expensive drugs for the appropriate reasons and to treat the appropriate conditions.
Prior authorizations target the utilization of drugs for which there are multiple FDA-approved uses/indications or specific industry-accepted usage guidelines. This clinical program requires members to get prior approval from the PBM. This means that the member, pharmacist, or provider will need to contact the PBM before the member can fill the prescription.
Examples of therapeutic classes in which effective prior authorization programs are available include: topical acne treatment (e.g., Retin-A), anti-inflammatory drugs, anti-fungals, and growth hormones.
Quantity Limits
Quantity limits are edits to ensure that members are only obtaining enough medication to treat their condition and not more. These limits not only result in cost savings for the plan by limiting the overall quantity of drug that a member can obtain, but can also serve to minimize the potential for fraud and/or abuse of the plan.
Quantity limits are determined based on clinical guidelines and industry best practices. Drugs with a quantity limit can only be filled for a fixed, pre-determined quantity per prescription per a specific time period.
Quantity limits are often implemented as a safety measure. For example, migraine treatments have an FDA-approved maximum dose per week and per month. Patients regularly taking quantities in excess of these limits can lower their migraine threshold and exacerbate their condition.
Examples of other therapeutic classes in which effective quantity limits are available include: erectile dysfunction drugs (e.g., Viagra), narcotics (e.g., Oxycontin), and sleep aids (e.g., Ambien).
Step Therapy
Step therapy clinical edits are slightly more complicated but can often more effectively encourage the use of a less-expensive drug. A step therapy edit will cause some initial member disruption in order to communicate to members that they must first "try and fail" a less-expensive clinically effective alternative drug to treat their condition.
Once they have met the pre-approval conditions, however, there is no further disruption. Drugs are organized in a series of “steps,” with members being required to try a particular drug for their condition before the plan will cover another drug for that condition.
For example, if Drug A and Drug B both treat the condition, the plan may require the prescriber to write a prescription for Drug A first. If Drug A does not work, then the plan may cover Drug B. The prescriber will have to provide the PBM with information about the member's Drug A utilization and their medical condition in order for Drug B to be covered.
Examples of therapeutic classes in which effective step therapy programs are available include: proton-pump inhibitors (e.g., Nexium), cholesterol-lowering drugs (e.g., Lipitor), antidepressants (e.g., Lexapro), and sleep aids (e.g., Ambien).
Ritu Malhotra is vice president and clinical pharmacy consultant at The Segal Company. Ritu holds a Doctor of Pharmacy from the University of the Sciences in Philadelphia College of Pharmacy and a bachelor’s degree in Biology from Lehigh University. Ritu can be reached at rmalhotra[at]segalco.com.