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Weeding out waste in benefit design.

Year: 2009
Type: article
Abstract: When Michael Jacobs does the math on drug costs for an employer, he focuses a lot of attention on the waste line. “From an employer’s perspective, we have seen over time a great deal of abuse, where prescription drugs are potentially used inappropriately,” says Jacobs. As national clinical practice leader at Buck Consultants, headquartered in New York City, which advises employers on how to design their drug benefits package, Jacobs has plenty of case studies at his fingertips to illustrate the problem. “The proton pump inhibitor is an example,” explains Jacobs, citing a class of drugs used to reduce gastric acid in the stomach. “They’re approved for up to four months of therapy for indications that are approved by the FDA, but we’ve seen prescriptions average five or six months in a number of populations. If your average months of patient utilization are above the maximum recommended by the approving government agency, and [the effect is to raise] an employer’s drug benefit costs three or four percent, then steps should be taken to manage this. With biologics, many employers are using the same cost-saving techniques they once used with oral medications, says Michael Jacobs, at Buck Consultants. “Biologics are another example,” he continues. “These drugs can cost $19,000 or more annually, and using them off-label in ways that are not proven effective, frankly, is not only expensive but unwise. If a physician prescribes a drug as approved by the FDA, then coverage of that medication will be approved. What we want to do is stop paying for inappropriate use.” That employers also want to take a harder line on drug costs was made clear when Jacobs totaled up the figures from a Buck Consultants employer survey, which paints a changing picture of drug benefit design. In a sign that purchasers are ratcheting up drug benefit cost containment, the use of cost sharing as a utilization management tool by responding companies zoomed from 51 percent to 76 percent over 12 months. To help underscore the growing appetite for new cost-control measures, Jacobs cites a recent study by Takeda Pharmaceuticals that states that 79.4 percent of plans now use prior authorization rules; quantity limits on prescription drugs have been adopted by 81 percent of plans; and half of all groups report that step therapy is now a standard component of prescription drug programs.1 “These are much higher numbers than we have seen historically,” says Jacobs, who adds that the recession has pushed employers to get even tougher.
Author: John Carroll
Language: English
Open Access status: green
OpenAlex ID: W2182045542
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