Aligning Drug Copayment With Value Not Cost

Implementing a value-based drug formulary (VBF) that uses cost-effectiveness analyses after safety and efficacy decreased pharmacy costs by 3% in the first year, according to a study published in the Journal of Managed Care & Specialty Pharmacy.

The researchers compared pharmacy cost per member per month during the first year of implementation of the Premera Blue Cross VBF with 2 groups: observed pharmacy costs in the year prior to implementation and expected costs if no changes had been made to the pharmacy benefits.

The VBF is a 4-tier formulary system with an additional preventive drug tier, which is not subject to member cost sharing. Higher value drugs were placed in lower tiers, and subject to lower copayments. The preventive tier comprised of 39.9% of drugs, and tiers 1, 2, 3, and 4 included 14%, 36%, 7.4%, and 2.7% of drugs after implementation of VBF.

“In traditional formularies, drugs with lower copayments tend to have low acquisition costs,” the authors wrote. “However, since value is defined based on a ratio of costs to benefits, it is possible for high-cost drugs to achieve a lower tier status if the benefits outweigh the costs.”

The researchers also estimated the impact of the VBF on member cost share within 3 chronic disease cohorts: diabetes, hypertension, and hyperlipidemia.

In the year after the VBF was put in place, pharmacy plan payments decreased $7.82 per member per month, or 11%, compared with the estimated payments if no changes had been made to drug benefits.

Without a benefit change, the overall average member cost share for the chronic disease cohorts were expected to increase 12%, but the observed increase was 5% for diabetes, 8% for hypertension, and 2% for hyperlipidemia.

“We believe that a VBF will be well received in settings where a trust relationship exists between employer and associates, such that most associates believe that the employer cares about their health and is acting in their best interest,” the authors wrote.