Performance Improvement 2007. What Are Private Sector "Best Practice" Approaches to Control Costs of Prescription Drug Benefit Programs?



This study identified and described in case studies the effective strategies and best practices developed by private sector organizations to manage the costs of prescription drugs. While state Medicaid and other public-sector efforts to contain drug benefit costs have been well documented, information on the nature and effectiveness of private sector approaches has been limited. Case studies were formulated for five private organizations that provide, manage, or fund prescription drug benefits which have achieved positive results to control the growth of drug costs. The organizations chosen were Tufts-New England Medical Center, Pitney Bowes Inc., Medco Health Solutions Inc., Provider Service Network, and Kaiser Foundation Health Plan.

This study identified cross-cutting themes used by the private sector and outlined opportunities for further research. Several cost savings strategies used by these companies were identified. These included: the use of clinical pharmacists to educate physicians and recommend cost-savings strategies, establishing tiered and evidence based formulary systems to limit high-cost branded drugs, employing hospital information technology systems to identify high-cost practices and suggest lower-cost drug alternatives (such as generics, pill-splitting), limiting detailing and sampling of drug representatives, encouraging mail-order dispensing, and participating on pharmacy and therapeutic (P&T) committees (multi-disciplinary health care provider groups reviewing medical services) and hospital committees. Benefits these best practices yielded included: greater use of generic drugs and improved compliance with drug formularies. These practices resulted, in turn, significant immediate cost savings and slower drug cost increases.

Report Title: Identification and Description of Industry Best Practices to Manage the Costs of Prescription Drugs
Agency Sponsor: ASPE, Office of the Assistant Secretary for Planning and Evaluation
Federal Contact: Bush, Laina, 202-260-7329
Performer: Abt Associates Inc; Bethesda, MD
PIC ID: 8474

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"PerformanceImprovement2007.pdf" (pdf, 717.63Kb)

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