The Pharmacy Benefit Management Institute (PBMI) conducted its annual drug benefit plan design survey of U.S. employers in May and June 2009. The survey was completed by 417 employers representing 7,041,676 members.

Key Findings

Formulary

A total of 86.9% of respondents using a formulary have it structured with multiple tiers. Closed formularies have almost disappeared, replaced by formularies with multiple tiers.

Mail-service Pharmacy

A total of 96.7% of employers offer access to mail-service pharmacy to dispense maintenance medications used to treat chronic conditions. Only 17.4% of employers require maintenance medications to be dispensed by a mail-service pharmacy, commonly referred to as “mandatory mail”. A total of 22.1% of self-insured employers have mandatory mail-service contrasted with 7.7% of fully-insured employers. Nearly 84% of employers are using retail pharmacies to dispense 60 or more days supplies of medications. This is an increase of 52.3% since 2008. Data show 66.5% of employers using retail pharmacies to dispense maintenance supplies are not restricting dispensing to select pharmacies.

Specialty Pharmacy

A total of 59.9% of employers offer a specialty pharmacy benefit. There appears to be a decline in the number of employers permitting the dispensing of specialty drugs at retail pharmacies. There is 70.9% of carve-out employers offering a specialty pharmacy benefit compared to only 41.6% of carve-in employers. This is a significant difference at the 95% level. Carve-out employers are significantly more likely to 1) use their pharmacy benefit managers (PBMs) as exclusive suppliers of specialty drugs, and 2) restrict coverage in medical plan to channel specialty drugs to their PBMs.

Affordability of Prescription Drugs

A total of 70% of employers are concerned about the affordability of prescription drugs. Employers establish drug plan designs to share some portion of drug costs with members, usually based on an amount for each tier or drug category. On average, members paid 25.2% of a retail prescription and 19.2% of a mail prescription. These numbers have changed little since 2007 when PBMI began capturing these data.

Plan Design Configuration

Plan designs with three or more tiers are used by 84.7% of employers. As in prior years, the most commonly used cost sharing approach is a three-tier plan design (generics, preferred brands and nonpreferred brands). The trend toward increasing use of more three- and four-tier designs continues for a third year. Employers with carve-in plan designs are more likely to adopt two-tier and three-tier copayment cost sharing than those with carve-out plan designs. Less than half (48.5%) of employers have adopted a value-based design tool in their drug benefit.

Pharmacy Reimbursement

Negotiated discounts for retail brand and generic prescriptions continue to increase resulting in the decrease of AWP prices and dispensing fees. Because of the small number of employers supplying pharmacy reimbursement data, the findings are directional in nature. Specialty pharmacy reimbursement for 2009 is similar to retail brand rates with a slightly higher average dispensing fee. The cost sharing data do not show broad adoption of a specialty drug cost sharing tier.

Generic dispensing rates have increased in both retail and mail since 2008. The range of generic dispensing rates continues to expand as more generic drugs become available for medications commonly used by the ambulatory population covered by commercially insured drug benefit plans.

Utilization Management Tools

Employers use a broad range of utilization management tools in their plan designs for all diseases and conditions. The most popular tools are refill too soon (89.5%), quantity limits (88.8%) and prior authorization (80.6%).

Implications of Findings

Prescription drug benefit management indicators are trending in the right direction as a result of multi-faceted approaches to controlling costs and utilization. Employers are keeping their rate of drug cost increases to an average of 4.4%, the lowest rate of cost increase since PBMI began this survey in 1995.

The use of multi-tiered cost sharing amounts creates incentives for members to select the lowest net cost drug that is medically appropriate. When paired with education and clinical management, the rate of increase in prescription drug expenditures slows. Often, employers realize savings from the prior year. Creating an economically sustainable drug benefit is increasingly critical as more specialty drugs reach the marketplace. Employers are beginning to respond to the bulging biotech pipeline by working with their pharmacy benefit manager partner—whether a health plan, insurance company or PBM—to drive dispensing to the optimal drug dispensing channel. The growing complexities of specialty drug therapies call for patients to get the right drug at the right time from the right retail, mail-service or specialty pharmacy to ensure needed clinical support and care management are provided.

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