Improving the Clinical & Economic Value of Pharmacy Benefit Plan Strategies

Top 3 Things You’ll Learn

  1. 5 ways to improve pharmacy benefit clinical and economic value for 2021
  2. How to balance clinical utilization and contract management strategies for self-funded Rx plans
  3. The value of driving members to alternative medications when appropriate

When you are delivering a prescription benefit, it’s essential to maintain clinical value as the standard. Everything has to be done on the basis of clinical. Prescription drug manufacturers have a clinical orientation so that their drugs get approved by the U.S. Food and Drug Administration (FDA), and they promote the clinical value of their medications. Pharmacy Benefit Managers (PBMs) have several drug formulary options, and those are designed around clinical value as well. Improving the clinical and economic value of a pharmacy benefits plan requires a strategic approach to evaluating, revising, and monitoring the solutions in place – as well as taking a methodical approach to ensuring members are utilizing the most clinically appropriate and cost-effective medications.

1) Evaluate the Pharmacy Plan Value

The first step to improving the self-funded pharmacy benefit plan’s value is to evaluate the current strategies as well as the long-term value of the combined contract and clinical management approach. When plan sponsors solely focus on the here and now, they often lose sight of the big picture and long-term value of the combined pharmacy management solution. It’s important to utilize a data-driven approach to evaluate the plan’s performance in both areas over time, ideally 24 months.

Visually seeing the financial puts and takes impacting plan performance over a period of 24 months helps to reveal potential gaps, highlights successes where gaps have been closed, and identifies new sources of Rx utilization as well as benefit plan design opportunities to consider. By benchmarking against themselves in this way, plans get a full picture of the past and present. The data insights provide informed guidance of what is possible for them going forward.

2) Optimize the Drug Formulary

PBM drug formularies are not always designed to focus on the economic value. Rather, the list of the preferred drugs is designed to influence drug product selection and usually involves drug manufacturers negotiating with PBMs for optimal formulary placement of their top products. As a result, plan sponsors find themselves in a situation sometimes where they see multiple choices for a formulary drug – where some have better clinical and economic value than others.

When that’s the case, plan sponsors need to implement Rx strategies that help steer people toward the most clinically and economically valuable medications. This way, when the doctor writes a prescription or a patient goes to have the prescription filled, the plan knows that they’re always using the most cost-effective, clinically appropriate drug. Formularies are dynamic, so the solution needs to be foundational and comprehensive in nature so that it addresses current risk areas and yet can adapt to market changes over time.

3) Revise Benefit Plan Design

Rising plan costs many times are the result of a pharmacy benefit plan design that is not aligned to the employer’s goals – making it the weakest link in a proactive trend management strategy. Plan design typically is regarded a static concept, evaluated as the last possible consideration for change. However, prescription drug utilization is a dynamic event, fluctuating based on membership changes and individual member life events.

Additionally, plan sponsors’ goals often change from year to year. As those goal changes and higher plan costs are incurred, plan design must routinely be evaluated to ensure it is performing in alignment with the plan’s clinical and economic goals. Employing a dynamic member cost share helps maintain plan integrity over time.

For example, generic drugs are launched all throughout the year, and so capitalizing on the value of generic Rx launches can help lower plan costs. Adding Dispense as Written (DAW) prescription penalties is one way to drive members toward lower-cost generic options when available and appropriate. If a member requests a brand name drug instead of a generic at the pharmacy, a DAW penalty allows that member to receive the brand name medications but at a higher cost share.

4) Focus on High-Cost Claims

Because of the mix in prescription drugs now, 5%-10% of our self-funded employer clients’ prescription claims are for higher-cost brands, typically over $1,000, as well as specialty drugs. Roughly 2% of the members will for 50%-60% of the costs of any given plan. As plan sponsors think about what could help reduce prescription drug costs, emphasis should be on those Rx claims that are on the high-end of the brand drugs category and on the specialty drugs category.

The clinical Rx strategy for these drugs should focus on monitoring for potential prescribing pitfalls that could have significant impact on the plan. Many times, the question is not whether a specialty medication meets clinical criteria on the surface. The real issue requires a deeper inspection to see if the specialty medication is being dosed correctly and at an appropriate frequency, and if any dose increases are occurring at an appropriate rate.

With 2% of the members driving up to 60% of pharmacy benefit costs, improving the benefits value is a matter of evaluating what is most clinically and economically sound – and finding the right balance for the plan.

The issue of dose creep is common in specialty medications prescribed as anti-inflammatory therapies, which comprise the majority of most employers’ specialty spend. Many times these drugs get approved based on clinical rationale without any additional review to validate increased quantities dispensed or dispensing frequency. Even when PBMs have valid clinical criteria that upholds the concept of medical necessity, there are no checks to validate appropriate increasing of the specialty medication dosage or frequency. A robust independent prior authorization process could be used as part of a prospective independent review process that limits prescribing to a certain dollar threshold and day supply, while a retrospective review could assist in establishing a management plan that monitors previously approved authorization and excessive dose/frequency allowance.

When physicians make a PA request, at RxBenefits, we are looking for documentation and chart notes to support the diagnosis, dosing, and any other specific criteria that the drug might carry. Most PBMs don’t do this. Instead, they will accept verbal information and don’t get as much clinical detail to consider in the PA review process. This is how some critical clinical utilization pitfalls slip through the cracks. In most cases during our reviews, patients are redirected to a drug that is more clinically appropriate at a lower cost, and perhaps an empiric therapy that they would start at before moving to a more advanced therapy.

5) Redirect to Clinically Appropriate Alternatives When Possible

A lot of the demand for prescribing high-cost, low clinical value formulary drugs is based on coupons that are promoted by drug manufacturers through the physician’s office. If somebody is requesting a more expensive brand just because it’s a new combination being marketed and there are less expensive products on the market, the goal is to redirect those to appropriate alternatives. The goal is to steer members to the more clinically and economically appropriate alternative medication. The intent is not to create disruption, but to make sure that those members are redirected whenever appropriate.

A good example is someone going to the pharmacy to get a low clinical value drug like Duexis®. The claim is going to reject because there are reasonable alternatives for a fraction of the cost. Duexis, for example, costs $2,600 whereas the over-the-counter equivalents Advil® and Pepcid® cost about $20. Another example of this is someone who has acne and is looking to take a newer, more expensive medication in the range of $1,200. By flagging this claim before it gets paid, we can redirect that member to a less expensive brand-name drug that is equally effective but only costs $400.

Managing Member Disruption in Pharmacy Benefits

As a Pharmacy Benefits Optimizer (PBO), we believe the optimal pharmacy benefits strategy is a matter of evaluating the value of doing – or not doing something – that is clinically and economically sound and finding the right balance for the pharmacy benefits plan. We respect that as a drug benefit solution, redirecting members to more clinically effective and cost-conscious Rx options does create some member disruption in the pharmacy benefit program. However, as discussed above, the goal is to try to impact as few members as possible while delivering substantial savings to the plan. With 2% of the members driving up to 60% of the cost, you can see where we’re touching a fairly small amount of the membership, but savings from these Rx clinical utilization management programs can net 7%-10% or even more depending on the circumstances.

See these real examples of how clinical Rx management helped protect both members and plan sponsors.

To learn more about how pharmacy optimization strategies like these can help your clients achieve their pharmacy benefits cost and clinical utilization goals, check out our free pharmacy benefit guide on Building an Optimized Clinical Playbook.

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