Pharmacy Benefit Management Supported by Employer Case Study

Atlanta—During a Managed Care Essentials session at the AMCP meeting, Kathleen Thompson, manager of total rewards, Matthews International, and Mara Pawlis, senior analytic consultant, CVS Caremark, presented Results of a PBM/Employer Strategic Pharmacy Benefit Partnership. The transition by Matthews International, a prominent product marketing company, to a pharmacy benefit manager (PBM) plan was used as a case study to highlight the potential value of PBM plans. The presenters opened the discussion with a history of Matthews International, followed by an overview of the company’s transition to a PBM plan. They stressed that a combination of the right prescription and the right behavior by plan members is needed to improve health and control costs. Prominent factors driving the PBM transition by Matthews International included excessive growth in per member per year costs and a low use of cost-saving services, such as fulfillment of maintenance medications through a mail-order pharmacy. To guide utilization associated with cost control, the corporate strategy included fundamental plan design changes, efforts to increase maintenance medication by mail, a generics-first program to increase the generic dispensing rate (GDR), and a retrospective drug utilization review (DUR). Clinical aspects of the new PBM strategy included a fraud, waste, and abuse program; a gaps-in-care program; an adherence to drug therapy program; and a specialty utilization management program. The presenters discussed specific case studies associated with different aspects of the PBM transition, and resulting outcomes: Case 1: Create Cost-Savings While Maintaining Member Satisfaction through Plan Design A move from a 2-tier to 3-tier copay structure, as well as a reduction in copay for generics, resulted in a 3.8% reduction in net cost. Case Study 2: Increase Utilization of Maintenance Medications through Lowest Cost Channel An incentivized mail plan design was implemented, with a doubling in retail copay for maintenance medications after the second retail fill. Members were given the choice of 90-day mail service or 90-day fill at a local CVS pharmacy for the same copay. This change was associated with 3.4% in gross savings, a 15% increase in 90-day GDR, and a 33% increase in eligible maintenance prescriptions. Case Study 3: Implement Generic First Program to Increase Utilization of Generic Medications A generics-first strategy for targeted brands in 12 classes resulted in a 9% reduction in total gross drug spending, an 18% improvement in GDR in the targeted drug classes, and a gross reduction of $5.67 per member per month (PMPM) in all 12 classes. Case Study 4: Ensure Appropriate Drug Utilization A DUR intervention resulted in 2.7% in net company savings, 3.4% in member savings, and $2.57 gross savings PMPM. Case Study 5: Address Fraud, Waste, and Abuse A Fraud, Waste, and Abuse Program conducted proprietary scoring, clinical coordination, and drug appropriateness review. This intervention resulted in $1.87 gross PMPM savings, $1.56 net PMPM savings, 69% response rate from prescriber outreach, and a reduction in average utilization per member. Case Study 6: Change Member Behavior to Improve Health Outcomes Efforts to ensure clinical guideline adherence, identify gaps in care, and improve medication adherence in 9 chronic disease states resulted in a 33% improvement from suboptimal to optimal adherence. Case Study 7: Manage Specialty Drugs The adoption of a specialty pharmacy network and a specialty utilization management process resulted in specialty utilization cost avoidance of $55,000. Overall, the combination of pricing changes and intervention programs resulted in 16% savings for Matthews International during the 2010 calendar year. There were few disruptions or complaints regarding the new program. Ultimately, the company benefited from the cost-savings afforded by the PBM interventions, and plan members benefited from reduced costs and improved health outcomes.