Emory Report

August 23, 1999

 Volume 52, No. 1

Health plans may switch to three-tier prescription option

Last year Emory's point-of-service health care plan for its employees, EmoryCare, ran a funding deficit, which the University absorbed. This year to date, the plan is again running a deficit, much of it due to high pharmacy costs, which have risen 62 percent on a per member basis since 1995. In fact, 1998 was the first year in which more dollars were paid for prescription drugs than inpatient services, making pharmacy the highest expenditure in the EmoryCare program. It is a major cost element in the HMO plan as well.

It's not uncommon for a single brand-name prescription to cost $200 or more retail. Pharmaceutical industry experts often cite research and development as a major factor in the staggering costs. New drugs are protected by patent for a minimum of 10 years. When the patent expires another pharmaceutical company can copy the original drug's ingredients. These generic versions of brand-name drugs are required by the Food and Drug Administration to have the same active chemical composition, to be dispensed in the same form, such as tablet or capsule, and to be taken in the same dosage. The only difference is that you're not paying for the "name."

While some prescriptions are available in brand name only, many others have a generic equivalent at less cost. For employees needing several prescriptions monthly, buying generic drugs will increase their savings. When they dispense prescriptions, ask your doctor or pharmacist if there is a suitable, less expensive generic equivalent that will provide the same results.

"To help curtail pharmacy costs, beginning Jan. 1, 2000, we are considering changing to a 'three-tier' structure for both EmoryCare (POS) and EmoryChoice (HMO)," said Pat Douglass, assistant vice president for Human Resources. The first tier would be generic, with the lowest co-payment; the second formulary-a list of preferred, commonly prescribed drugs-with a higher co-payment; and the third tier would be non-formulary, with the highest co-payment. "We also plan to offer a mail-order prescription service, which will allow you to get a 90-day supply for the cost of a 60-day supply," Douglass said.

In addition to requesting generic drugs when available, employees can save money on prescriptions next year by:

  • Consulting with their doctors to determine if a prescription is part of the vendor's formulary. (Employees will be provided a list of formulary drugs.) Remember, the co-payment for a formulary drug will be less than that for a non-formulary drug.
  • Using the mail-order prescription service. Internet ordering will also be available.

Even with increased co-payments on prescriptions, Emory employees will still save quite a bit over the retail cost. To get an idea of this, the next time you get a prescription filled, ask the pharmacist what you'd be paying without insurance. You'll be amazed.

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