Health Plan Initiative Reduced Prescription Drug Spending

Armen Hareyan's picture

Applying four cost-reduction strategies to its MedCost health plan from 2003 to 2005 saved Wake Forest University Baptist Medical Center more than $6.6 million in prescription drug costs, according to a study published this week in the American Journal of Managed Care, the Winston-Salem Journal reports. The health plan covers 11,000 employees and a similar number of dependents.


Thecost-reduction strategies included encouraging use of generic drugsover brand-name drugs, use of non-drowsy antihistamines available overthe counter and purchase of higher-dosage pills to be split, as well aslimiting the amount available of certain medications not used daily.The increased use of generic drugs, which rose from 40% in 2003 to 57%in 2005, was the biggest cost-saving measure.

David Miller, lead author of the study and assistant professor at Wake Forest University School of Medicine,said of the results, "One reason for this success may be that the planwas careful to avoid shifting costs to its members." He added, "Wedidn't want a change in use of medication, or less use of medication,which can be a bad thing for those people with chronic conditions." Themoney saved from the program was used to "invest in new initiatives toimprove the health outcomes of patients with chronic disease, such asreducing the copayments for insulin and diabetic-testing supplies toencourage medication adherence and monitoring," according to the study.

Curt Furberg, co-author of the study and a professor of publichealth sciences at Wake Forest, said, "The study demonstrated that muchof what we spend on prescription drugs is wasteful and that otherinstitutions, hospitals, health plans, state and federal governmentscan learn from our experience" (Craver, Winston-Salem Journal, 8/10).

Reprinted with permission from kaisernetwork\t\t\t\t\t\t\t

Reprinted with permission can view the entire KaiserDaily Health Policy Report, search the archives, andsign up for email delivery at The Kaiser Daily Health Policy Report is published,a free service of The Henry J. Kaiser Family Foundation.