Medication selection: Tools to minimize patient cost and make prescribing easier.
Medications are one of the highest costs of health care for both patients and payers, and represent a significant cost-savings opportunity in value-based arrangements. In 2016, over $329 billion was directly spent by patients and payers in the U.S. on outpatient medications.1 Drug cost varies widely for formulary-covered agents, and the exact cost is not readily available to prescribers. In general, utilization of generic drugs as preferred options drives cost down. For example, the Anthem EPHC value-based contract has a generic drug prescribing rate of 87%, yet the 13% of brand-name drugs prescribed represent 85% of the overall outpatient drug cost in the program. Further, it is estimated that a 1% increase in generic prescribing can result in a 2.5% to 3.5% reduction in overall drug cost. Increasing generic prescribing rate to 90%+ and utilizing less expensive brand-name options represents a significant cost-savings opportunity.
Selecting low-cost medications can be challenging for prescribers. The medication formularies have wide variation, cost is often negotiated and not transparent, and changes are frequent. It is common for a medication to be prescribed, the patient to find out at the pharmacy it is not covered, and for the prescriber to rework by sending an alternative prescription. This is frustrating for all, and results in higher cost.
Real-time benefit check tools at the point of prescribing continue to improve, but are not yet seamless, and are not yet comprehensive for all medication formularies. This technology will continue to improve, but a more immediate solution for value-based programs is needed.
A solution—Formulary Quick Reference Guide.
The population health pharmacy team has begun to develop Formulary Quick Reference Guides for common classes of medications such as antidiabetic medications, inhalers and statins. The goal of these references is to increase cost transparency to improve provider efficiency and decrease costs to patients and payers. By providing a snapshot of potential costs and the payer’s preferred medications prior to prescribing, there is a reduced back-and-forth between pharmacies and prescribers and a potential lower cost.
Sample from the Diabetes Formulary Quick Reference Guide:
Coordinated Care’s engagement team has begun to disseminate this tool to provider practices and the feedback has been positive. The pharmacy team will continue to develop additional classes of drugs, and will update existing documents routinely.
The following case study provides an example of how a provider and care team could use the tool to improve care and reduce cost.
Dr. Brown is wishing to add a second diabetes medication to patient AB, a 52-year-old female with Type 2 diabetes without renal complications and a most-recent Hgb A1C of 7.5%. AB is currently only prescribed metformin and wishes to take a once-daily oral medication. Her fasting blood sugar is controlled, but her post prandial continues to stay slightly elevated. The patient denies any signs or symptoms of hypoglycemia. Both options below present acceptable prescribing options that will yield similar results, but have two very different costs to the patient and payer.
- Metformin 1000 mg ER (Fortamet)—2 tablets, once daily
- Sitagliptin (Januvia) 25 mg once daily—1 tablet, once daily
Total annual cost: >$15,000
- Metformin 500 mg ER (generic Glucophage)—4 tablets, once daily
- Glipizide 5 mg XL—1 tablet, once daily
Total annual cost: ~$1,000
Please contact Joseph Vande Griend with any questions.
Joseph Nardolillo, PharmD, PGY2 Ambulatory Care resident, authored this article.
- Micah Hartman et al.; “National Health Care Spending in 2016: Spending and Enrollment Growth Slow After Initial Coverage Expansions”; Health Affairs 37(1): 150-160; January 2018. Note that the “retail prescription drugs” category excludes drugs purchased directly from physicians or hospitals (e.g., infusion drugs).