Reprinted from DRUG BENEFIT NEWS, biweekly news, proven cost management strategies and unique data for health plans, PBMs, pharma companies and employers.
By Lauren Flynn Kelly, Editor
May 11, 2012 Volume 13 Issue 9
Managed care organizations are increasingly being put in a position of subsidizing consumer copay coupons as pharmaceutical manufacturers attempt to maintain market share of brand-name drugs. And while coupons may be considered beneficial by certain stakeholders outside the pharma industry, there are ways plans can curtail their use without negatively impacting the patient-clinician relationship, suggested two pharmacy benefit experts.
“These cards are coming fast and furious and as we see a record introduction of generics, there’ll be a very close correlation to the number of cards being introduced,” predicted Rob Noel, practice leader, managed care market, at Pharmaceutical Strategies Group, LLC, speaking at the April 26 AIS webinar, “Health Plan Strategies to Combat Consumer Drug Copay Coupons.” As of November 2011, there were 362 cards being offered, compared with just 86 in July 2009, he said, citing a study released by the Pharmaceutical Care Management Association (DBN 11/11/11, p. 7).
While opponents of the cards argue that they raise plan sponsors’ drug costs by steering patients toward high-cost, nonpreferred drugs, pharmacists and physicians are fans of the cards, and consumers know little about their impact on plans, explained Brent Eberle, R.Ph., vice president of health strategies at Wisconsin-based PBM Navitus Health Solutions, LLC, who also spoke at the webinar.
Eberle pointed out that pharmacists are in favor of the cards because they receive a secondary dispensing fee paid by the pharmaceutical company sponsoring the copay card. The drug company essentially acts as the secondary payer because pharmacists submit claims to both the drug company and the insurer. “And if the copay has been a barrier to refill and adherence, it does contribute to increased business as well,” he observed.
Physicians like the cards because they not only enhance access to medications that patients might not otherwise be able to afford, but they come with toll-free numbers and Web sites with a great deal of information about the medication and the patient’s condition, which saves the physician time, added Noel.
Recognizing that there are two sides to the copay coupon debate, Eberle said one of the challenges in looking at ways to manage these cards is determining when it’s appropriate to work against them and when it might be to an insurer’s advantage to work with them.
Aside from traditional plan design strategies such as increased cost sharing for brand and specialty tiers or the more aggressive approach of implementing a closed formulary, Eberle advised that payers consider a more targeted method of removing certain brand products from specific categories that have ample generic options as opposed to eliminating coverage of an entire tier. “This is more of a scalpel approach and can be targeted to specific products and help drive utilization to preferred products, which can lead to increased generic utilization and also can lead to increased rebates on preferred products as your formulary compliance is improved,” suggested Eberle.
Supporters of copay cards have argued that PBMs want to combat their use simply because they’re concerned about losing rebate revenue (DBN 12/16/11, p. 6), but Eberle argued that from Navitus’s perspective, that’s not the case. “100% of all rebate revenue goes directly back to our clients, so we do not benefit in any way, shape or form from rebate revenue. And we combine that in when we do our pharmaceconomic modeling to determine our net cost,” he maintained. “I think if you have a different model or your incentives are different, any spillage away from preferred products does decrease revenue and drive up the plan cost but also could potentially take money away from the PBM if they’re generating revenue from that perspective. Whether it’s being done to increase PBM revenue in those traditional models or decrease plan costs, the end result I think is similar.”
Plans Can Work With Pharmacies, Prescribers
Some additional payer strategies outlined by Eberle are:
· Utilization edits. “If your hands are tied from a plan design perspective and don’t have the ability to remove specific products from the formulary, the next approach is to get at a similar end result by applying prior authorization and step edits across the brand and specialty products that you are concerned may be targets of copay cards.…And using your step therapy and prior authorization rules, you can work with prescribers to get those policies adopted quickly.”
· Partnering with the pharmacy network. If plans have an opportunity to work with a more limited pharmacy network, that may be a good opportunity to drive and dictate how these cards are used, such as implementing language in the pharmacy contract that limits the use of cards to only those products that are on formulary. Other options are to mandate plan approval prior to those cards being used or require that the information be provided back to the plan so it can track how many cards are being used and who’s using them. This may not be as doable with a broad network, he added.
· Member and prescriber education. “It’s pretty clear that members are only hearing one side of the debate in terms of the savings that can be available to them. So it’s really about educating the members on the purpose of the cards, the true cost of the products that the cards are being used for and making sure the members understand there may be times where it’s completely appropriate or where it’s really working against the payers’ true cost, and that includes being prepared with specific examples.” Employers can get involved in this as well through various forums, he suggested. Depending on the relationship that a plan has with its prescriber network, there may also be an opportunity to educate the physician around how the cards are shielding members from true drug costs and the potential negative impact down the road once the cards expire.
Tracking Copay Card Use Is Difficult But Doable
One of the biggest challenges for insurers and PBMs looking to manage copay cards is tracking their use and figuring out which ones are impacting a plan’s membership. That’s particularly difficult because the card is processed after the claim is adjudicated to the PBM, asserted Eberle. “The data that is shared is really limited in most cases to between the sponsor of the card and the pharmacy, and it’s really hard for the payers to get any access to that,” he sighed.
Nevertheless, Eberle said there are several methods a plan can adopt to identify situations where those cards are being used:
· Monitor tier 3 utilization or utilization of particular products. “If you start to see a spike despite a benefit change such as an increase in copay and you’re still seeing utilization that’s higher than what you’d expect, then it’s very likely that the copays are being offset with some type of discount card.”
· Develop tracking reports for products being heavily promoted with cards.
· Ask manufacturers to supply data on the number of cards being used in your market through your rebate contracting group and industry relations team.
There may also be opportunities to partner with a brand manufacturer on a copay card, such as looking to improve adherence in situations where cost is a barrier or offering copay cards for over-the-counter products, he added.
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