Pharmacy Benefits Managers Promote Low-Cost Generics

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Pharmacy benefits managers have begun offering tools to help consumers find low-cost generic drugs, adhere to drug regimens and increase consumer choice, all of which can help increase profit margins, the Wall Street Journal reports. According to the Journal, PBMs generally experience greater profit margins and members typically spend less when they use generic drugs, especially when ordered by mail. In addition, consumers who maintain their drug regimens help increase PBMs' revenues because they refill prescriptions more frequently. The Journal reports that promoting generic drugs and mail-order services has "helped benefits managers weather the soft economy better than many other health care concerns."

The Journal reports that Express Scripts is building an online program that allows the firm to customize marketing messages to members based on their profiles. The company also is attempting to convince more members to order prescriptions by mail rather than at brick and mortar pharmacies. According to Robert Nease, Express Scripts' chief scientist, moving patients who take maintenance medications -- such as those for diabetes, asthma or cholesterol -- to mail-order prescriptions is "good for everyone," including the consumer, the PBM and plan sponsors. After a generic version of the anti-cholesterol drug Zocor was introduced in mid-2006, Express Scripts combined financial incentives with "an advanced and aggressive communications program" that increased the ratio of consumers who used generic statin cholesterol drugs from 8% to 53.2% in March 2008. As a result of the campaign, plan sponsors and members reduced their spending by more than $600 million, according to Express Scripts.

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Medco Health Solutions launched its online tool, My Rx Choices, in 2007, which offers consumers information about alternative drugs and costs at different pharmacies. About 4.5 million people have visited the site this year, according to Medco. The company also sends members mailings with information about lower-cost drug options and provides renewal reminders via e-mail and automated phone calls. According to Medco, patients could save hundreds of dollars each month by switching to lower-cost generics. Forrester Research in a report this year said My Rx Choices' use of "personas" for individual consumers is effective and drives "the kind of education and decision support that turns passive Rx takers into careful Rx shoppers."

CVS Caremark in May introduced "first fill counseling," in which pharmacists discuss new medications with patients. Helena Foulkes, senior vice president for health services at CVS Caremark, said one-third of consumers with new medications do not make the first refill but the counseling program has increased the number of consumers who do by 15%. According to the Journal, CVS hopes that by combining the resources of its retail pharmacy division with its PBM, it can increase business for both divisions and provide consumers advantages over competitors. The program also encourages adherence to drug regimens through mailings and phone calls (Wisenberg Brin, Wall Street Journal, 9/17).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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