R.Ph. should take active role in formulary management
Health care in the United States broke through a pair of significant milestones in 1998, according to new data to be published in the Novartis Pharmacy Benefit Report: 2000 Facts & Figures and the Novartis Medical Benefit Report: 2000 Annual Resource. The data, collected by IMS Health, show that health-care spending topped $1.1 trillion, with the retail drug market contributing $112.5 billion to that sum.
The Novartis reports won't be available until this summer, but managing editor Robin Emigh, v.p. of Emron, which produces the reports for Novartis, provided a "prepublication preview" during the Academy of Managed Care Pharmacy's annual meeting in Phoenix last month.
The trillion-plus dollars spent on overall health care actually constitutes good news for number crunchers. Having risen just 5.6% from 1997, the total marked the fifth straight year spending has been under 6%. However, Emigh noted that the 15.4% hike in Rx spending "surpassed any of the growth rates of any of the other personal health categories."
With 92.6% of health plans now offering a pharmacy benefit, increases in health care and drug spending obviously affect efforts by pharmacy benefit management companies and employers/payers to cut spending. Emphasis on drug budgets and formulary issues intensifies as drug spending grows.
One method used to try to control spending, of course, is prior authorization, which is used by 88.3% of health plans to influence physician prescribing behavior, according to Emigh. Mail-order pharmacy is another cost-cutting tactic that continues to be used. Mail order accounted for 6% of the average health maintenance organization's Rx utilization in 1999 and is projected to increase to 7% this year. Mail order accounted for 12% of Rx spending last year; that number is not expected to change by the end of 2000.
Emigh also shared the latest data on the shape of drug formularies across the country. Medicare plans implemented more closed formularies than Medicaid or commercial/group plans in 1999. Medicaid led those three lines of business in relying on selective or partially closed formularies, and commercial/group plans implemented more open formularies than the other two models last year. Overall, 48.8% of enrollees were covered by a closed formulary, 18.1% by a selective/partially closed formulary, and 33% by an open formulary.
One method of cost control that does seem to be proving its wisdom is reliance on generic drugs. While generics accounted for 47% of Rxs filled last year, they amounted to only 16% of dollars spent.
Antidepressants were the most prescribed and most costly class of drugs last year. HMOs paid $25.95 per member, per year (PMPY) for antidepressants, with 461.4 Rxs being written for every 1,000 members.
Cholesterol reducers were the second most costly class ($23.15 PMPY), followed by proton pump inhibitors ($17.56 PMPY).
Emigh noted that major issues in health-care spending for 2000 include Medicare outpatient drug benefits, drug innovation and safety, state-mandated health benefits, and "e-powered" consumers. She explained that some 25 million of the estimated 70 million Americans who use the Internet sought health information on-line. She also said she had seen a study indicating that drug information is the second most sought after category of information for Internet users 50 and older.