Retail, Mail Order Drug Costs Up in 2002

October 24, 2003 ( - With prescription drug expenses headed skyward, employers are taking away cost-control stops and thus hitting employees right in the pocketbook.

Most noticeable among the increases are prescription drug co-payments in both the mail and retail segments. Average mail co-payments for first-tier drugs rose 16% from 2001 to 2002, second-tier witnessed a 20% increase and third-tier a 10% jolt. In the retail category, co-payments rose by approximately 10% overall, according to the 2003 Prescription Drug Benefit Cost and Plan Design Survey Report conducted by the Pharmacy Benefit Management Institute (PBMI).

Outside of increase, companies are also looking for ways to spread the costs. Formularies have become widespread, with the number of organizations utilizing these vehicles jumping to 89% in 2002 from 54% in 1995. In addition, the number of employers using prior authorization programs to manage costs has increased to 76% in 2002 from 43% in 1996.

“Employers cannot stay competitive by absorbing double digit pharmacy and other medical benefit cost increases without sharing some of that risk with their employees,” says Andrew Webber, president and CEO of the National Business Coalition on Health.

“However, in moving toward cost-sharing arrangements, they should be vigilant in tracking the impact of these new incentives on drug utilization, particularly rates of patient compliance with appropriate drug interventions for employees and their families with chronic conditions,” Webber continues.

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