Managed Care - November 2008 - (Page 24)

Aetna’s Brubaker. “That pretty much eliminates their ability to integrate these benefits.” Very large employers apparently do not see it that way, at least not yet. Nearly 60 percent of 508 respondents (all employers with 500 or more employees) to a recent Mercer pharmacy benefit survey use either a pharmacy benefit management company (48 percent) or pharmacy benefit administrator (10 percent) to manage their drug benefit. Forty-one percent rely on a health plan to provide pharmacy benefit services. Mercer says use of PBMs has been stable for several years. But use of PBMs is strongly related to employer size: Just 34 percent of respondents with 500 to 999 employees use a PBM, compared to 70 percent of those with 20,000 or more employees. PBMs are used most frequently in the South and Midwest (54 percent and 53 percent of respondents, respectively); they are least common in the West (34 percent). The three PBMs used most frequently by survey respondents are the three big players, which have the ability to offer substantial savings. CVS Caremark has 25 percent of these respondents, Medco has 24 percent, and Express Scripts has 15 percent. “We offer a focused approach,” says Jon Blauman, Medco’s vice president for marketing and product development. “We offer a degree of expertise that is very difficult for a health plan to replicate, and we offer a pricing model that is very difficult to match.” Market analysts agree that PBMs offer a powerful model. In a recent survey of 50 large employers by J.P. Morgan Securities, two thirds of respondents said that the probability of creating an internal drug benefit program under a medical benefit in the next two years was less than 25 percent. “Price and services were cited as the top two benefits of carving out drug spend,” the report says. UnitedHealth Group and Cigna and other plans have invested resources to provide some types of services similar to those of PBMs. “Major health plans, including national and regional health plans, have become more aggressive in their attempt to prevent carve-out of prescription drug benefits to PBMs,” according to the Mercer analysis. Their tactics include aggressive pricing. Cigna Pharmacy Management has implemented what it calls the Prescription Drug Price Quote tool, an online tool that allows members to seek the best price under their specific health plan, comparing brand-name drugs, generics, and thera- peutic equivalents and taking into account tier placement, mail-order discount, and other factors. The company reported that one employer that was testing this tool’s associated electronic coupon program achieved a 74 percent conversion to generics, resulting in a 7 percent reduction in the increase in drug costs for one year. Aetna officials say that it is the integration of medical and pharmacy coverage that is the single most important element in an internal drug benefit. The company announced in September that it experienced medical cost savings of 2.7 percent in both 2005 and 2006 as a direct result of the integration of the pharmacy benefit, about $6 PMPM at that time on a total PMPM medical cost of $227 for those in the analysis. The primary rationale for carving out PBM services is mail order, where most of the savings to payers occur. As PBMs are being forced by state laws to become more transparent, some plans are asking whether they might be able to provide the service more cheaply themselves. Some national plans have developed mail order services. Specialty pharmacy No single drug cost factor has caught the attention of purchasers as much as specialty pharmacy, the single largest contributor to the jump in drug prices, accounting for more than a third in the overall jump in drug costs last year. The primary reason for a plan to hire a vendor is that managing specialty pharmacy requires highly specialized expertise. But as populations age and disease management becomes an increasingly prevalent product line for health plans, folding specialty pharmacy into chronic disease management is increasingly cost-effective. A Medco survey found that purchasers continue to have strong faith in PBMs to help control the cost of specialty drugs. But a fifth of the respondents said that health plans could do the job just as well. “What purchasers want from us that they believe they cannot get from plans is that all of our systems revolve around our drug benefit,” says Medco’s Blauman. “That expertise carries over to specialty drugs.” Perhaps, says Aetna’s Brubaker, but “The single most important element in the provision of health care is quality, and integration of care is the single most important element in quality care.” MC 24 MANAGED CARE / NOVEMBER 2008

Table of Contents Feed for the Digital Edition of Managed Care - November 2008

Managed Care - November 2008 Editor’s Memo Contents News and Commentary Legislation & Regulation Letters Medication Management Compensation Monitor Do It Yourself for Less Biomarkers Promise, but Do They Deliver? Oncologists Complain About Drug Payment Consider Blood Pressure Self-Monitoring Q&A: Keep Industry in the Game Formulary Files Plan Watch Tomorrow’s Medicine Outlook Respiratory Syncytial Virus Managed Care Considerations Contents Continuing Education Objectives RSV Disease in the Pediatric Population In the Trenches RSV Infection in the Adult Population Health Plan Medical Director Health Plan Pharmacy Director RSV Issues and Solutions Assessment/Evaluation/Certificate Request Post-Test

Managed Care - November 2008

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