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CVS Caremark Research Illustrates How Innovative Pharmacy Benefit Plan Design Optimizes Generic Utilization

March 11, 2010 By: Jason A. Klein Category: Free Prescriptions, Medicine Advice, Medtipster, Prescription News, Prescription Savings

Medtipster Source: CVS Caremark (NYSE: CVS), 10/13/2009, http://info.cvscaremark.com/newsroom

This is an old release from November 2009, BUT I really liked it and have been meaning to post it for some time now.  The message of the CVS Caremark release and the study is: We as an industry need to advise benefit payors to focus on changing consumer utilization behavior rather than  shifting cost. This study took 15,000 people, gave them a $0.00 copay on generic medications. What happened? Overall plan costs decreased due to a GDR (generic dispensing rate) increase and therapy compliance/adherence increased in key classes (antihyperlipidemics, antihypertensives, antidiabetics). WOW…who would have thought that by giving away the cow, you could pay for the milk…

WOONSOCKET, R.I., Oct. 13 /PRNewswire/ — CVS Caremark (NYSE: CVS) presented data at the Academy of Managed Care Pharmacy (AMCP) Annual Educational Conference, which illustrates how innovative pharmacy benefit plan design can impact generic utilization. The study further underscores how pharmacy benefit managers (PBMs) can work with plan sponsors to manage costs and improve health outcomes by working to change plan participant behavior through increased engagement. The study found that implementing a $0 copay structure for generic medications can be an effective strategy to increase generic dispensing, with the generic dispensing rate (GDR) increasing to 60.8 percent (a 4.2 percent increase) during the study period.

“Our 2009 Benefit Planning Survey found that clients are more interested in identifying opportunities to change plan participant behavior, rather than shift costs,” said Jack Bruner, Executive Vice President, CVS Caremark. “The data presented at AMCP illustrates an example of how we can work with our plan sponsors to change and optimize participant behavior in order to achieve increased generic utilization. These types of partnerships enable us to effectively reduce costs for both our client and their plan participants without compromising quality or access.”

In addition to an improvement in GDR during the study period, the analysis found that the average participant cost share for generic medications decreased almost 10 percent (9.4 percent decrease). In addition, the average plan cost per 30 days of therapy also exhibited a slight decline, despite the reduction in generic copayment rates. Prevalence of use in three key preventative drug classes also increased significantly (participants on cholesterol lowering therapy increased 13 percent, on antihypertensive therapy increased seven percent and on diabetic therapy increased nine percent) as a proportion of eligible patients.

“While some plan designs work to drive generic utilization by increasing brand medication copayments, this study demonstrates that lowering the generic copayment can also be an effective strategy to increase GDR,” said Mr. Bruner. “In addition, the data indicates that lowering the generic copayment may also be associated with an increase in participants taking key preventative drugs, which could positively impact adherence and overall health outcomes.”

The study was designed to evaluate the results of plan design changes, including implementation of a $0 copay for generic medications, on the GDR, plan participant cost and impact of plan participant behavior changes on health outcomes. During the study period, participants were allowed to fill prescriptions for generic medications at a preferred retail pharmacy network at a zero dollar copay. The study included 15,000 plan participants covered by a self-funded employer group who were continuously enrolled under the benefit for the duration of the study period (12/1/2007 through 7/31/2009). 

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