Effective use of economic incentives and clinical tools help employers to control drug benefit costs

Employers are effectively controlling drug benefit costs and utilization, according to research findings in the Pharmacy Benefit Management Institute's (PBMI) 2009-2010 Prescription Drug Benefit Cost and Plan Design Report. PBMI's employer survey shows the average rate of increase in drug costs has dropped to 4.4%, the lowest rate of increase since PBMI began conducting the study in 1995.

"Drug benefit management indicators are trending in the right direction as a result of effective use of economic incentives and clinical tools," says Dana H. Felthouse, MBA, PBMI president. "Employer use of multiple-tier drug benefit designs continues to increase for a third year, encouraging plan member use of low cost medications when medically appropriate. Generic dispensing rates increased in both retail and mail, with the average retail rate at 63.5% and the average mail rate at 53.6%."

For the first time, the study notes differences among fully-insured, self-insured, carve-out and carve-in drug benefit programs. For example, self-insured employers and those with carve-out drug plans are most likely to use multi-tiered cost sharing. Another significant difference occurs in management of specialty pharmacy. More carve-out employers than carve-in employers offer a specialty pharmacy benefit, with carve-out employers more likely to use their PBMs as exclusive suppliers of specialty drugs.

The 2009 survey was completed by 417 U.S. employers representing more than 7 million members. Almost 70 percent of the respondents have a self-insured plan compared to 32 percent with a fully-insured plan. There's a fairly even use of carve-in and carve-out designs.

PBMI gratefully acknowledges the support of Takeda Pharmaceuticals North America (TPNA), Inc. for the provision of a grant to cover costs incurred in the production of this report. TPNA has no access to the individual responses or raw data gathered, nor do any other third parties. This protects the confidentiality of the survey respondents and ensures the independence and objectivity of this report.

Takeda has sponsored publication of the Prescription Drug Benefit Cost and Plan Design Report since 2001. Takeda also has underwritten development of online resources to make research findings easy to access and use in benefit planning. Online resources and print copies of the new report are available at www.pbmi.com.