Biotechnology Healthcare - June 2008 - (Page 52) Flexibility in Biologic Benefit Designs Can Deliver Big Rewards Some pioneering companies are making it easier for their employees to gain access to needed medications, regardless of the drug’s acquisition cost. The hope is that easing the financial burden on employees will result not only in happier workers, but more productive ones as well. BY JOHN CARROLL Senior Contributing Editor Y ears ago, Pitney Bowes, based in Stamford, Conn., shrugged off one of the biggest trends in pharma management. Instead of shifting more of its drug bill over to employees, it invested time and expertise to identify the drugs that its workers needed the most, and then lowered their costs. And when the day arrived to cover the first wave of biologics, the company spent little time anguishing over the prospect of paying for drugs that often cost five or six figures a year, opting instead for terms that most companies would consider generous. For the first $5,000 of the cost of a biologic, workers pick up $1,000, or 20 percent of the price of the drug, which can easily cost $2,000 or $3,000 a month. After that, the company covers the tab, whatever it is. But even that policy seemed a bit too severe for the company’s benefit designers. “If a person has trouble with the original payment, we work around it,” says Christine Berman, Pitney Bowes’ benefits manager. “There are subsidies available, or we could spread the cost out over time.” The employee’s share of the cost also isn’t assessed on each therapy that’s needed, Berman adds. Many of the workers who use biologics are taking multiple medications, combining therapies for, say, multiple sclerosis (MS) and hypertension. Their out-of-pocket cost is assessed for all the drugs they use. “Our experience has been that employees don’t take a medication if they can’t afford it,” adds Berman, “and if they don’t take it and can’t afford it, they won’t be able to come to work, or won’t be productive at work, or will be worrying about the children at home they can’t afford coverage for.” LEAP OF FAITH Pitney Bowes may have been a pioneer in flexible drug benefit design, but Jack Mahoney, MD, the company’s director of strategic healthcare initiatives, says the approach isn’t quite as novel as it once was. Other companies are beginning to do much of the same, working to identify the therapies that their employees need to stay productive and happy, and not sticking them with a big bill for their share of the cost. “We find a lot of companies are beginning to emulate what we did,” says Mahoney, who’s been lauded as a champion of value-based benefits. “They’re just later to the game. The first year or two of doing this was a giant leap of faith, and I think that most people were afraid of what the cost would be, particularly with biologics.” But you have to calculate benefits as well as costs. “By being on medication, these people can lead an active life, and that’s worth something,” says Mahoney. It’s the kind of story that advocates of value-based medicine — and a few drug benefits experts in the field — are cheering on, as they look to employers to design coverage policies for biologics that encourage patients to stay on a drug regimen. “Barriers should be removed for services that are considered high value,” says Mark Fendrick, MD, co-director of the University of Michigan’s Center for Value-Based Insurance Design. “We believe that as financial barriers fall, adherence will go up and healthcare will ultimately be enhanced.” NUANCED APPROACH Pitney Bowes is a leading example of a company that has bucked the cost-sharing trend, Fendrick adds, with others like Marriott, Eastman Chemical, or even his own employer, the University of Michigan, joining in. For Fendrick, the central argument for generous coverage when biologics are most needed focuses on how payers should judge the value of a drug, rather than just the cost. Making that evaluation for biologics — and removing the sticker 52 BIOTECHNOLOGY HEALTHCARE · MAY/JUNE 2008
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