Rising prescription drug costs pose a major challenge
for employers nationwide; here at Emory, 2003 expenditures on employee
prescription drug costs already have exceeded 2002s figure
of more than $14 million.
In an effort to manage these escalating costs, the University will
introduce a redesigned, four-tier drug plan for 2004. Caremark,
one of the largest and most well-respected prescription drug plan
administrators, will manage Emorys plan, which covers more
than 15,000 employees and their dependents.
In redesigning the pharmacy program, we established a pharmacy
committee comprised of medical and pharmaceutical experts who provided
oversight to the plan, said Alice Miller, vice president of
Human Resources. We know the redesigned four-tier structure
may create change for people, but we hope our employees will realize
it is being done for the broader good.
Without effective cost management, todays skyrocketing
prescription drug costs will quickly erode our ability to afford
comprehensive health care benefits, Miller continued. The
more we can keep our drug and health care costs down, the more we
can pass the savings on to our employees. We want Emory employees
to learn more about making the right choices to stay healthy, to
find less expensive but equally effective remedies, and to get more
involved in taking better care of themselves.
Following is an overview of the new four-tier structure:
Generally includes generic drugs (drugs that can be manufactured
and distributed after the original manufacturers exclusive
rights have expired) and has the lowest co-pay. Generic drugs have
the same active ingredients and quality standards as brand-name
drugs and are approved by the U. S. Food and Drug Administration,
but cost much less.
Generally includes many brand-name drugs on the Caremark preferred
drug list or formulary. The formulary drugs have been included
because of their clinical effectiveness, safety and cost.
Generally includes brand name drugs not included on the Caremark
formulary and some aggressively advertised drugs for which there
are lower-tier alternatives.
Primarily personal choice drugs, which include brand-n
ame drugs such as Levitra and Retin-A, and drugs that have lower
cost or over-the-counter alternatives.
In order to manage prescription drug costs, employees need to stay
informed and discuss cost-saving alternatives with their doctors.
For example, someone who takes Nexium (the purple pill)
for heartburn/acid reflux pays a $62 co-pay for a 30-day supply
or $124 for a 90-day mail-order supplybecause Nexium is a
Tier 4 drug and there are less expensive alternatives
But omeprazole, the generic equivalent of prescription Prilosec,
costs only $12 for a 30-day supply or $24 for a 90-day mail-order
By choosing generic and using Caremarks mail-order service,
the consumer saves $100 on a 90-day supply. (Keep in mind that a
prescription must be written for 90 days and not for 30 days with
Another example is Prozac, a brand-name drug. Prozac has an FDA-approved
generic equivalent, fluoxetine, which costs a $12 co-pay for a 30-day
supply at retail. However, consumers who still choose the Prozac
brand name would pay the generic co-pay plus the dollar difference
between the cost of the generic and the brand name drug. If the
generics actual cost to the plan is $38 for a 30-day supply
and Prozacs actual cost to the plan is $97 for a 30-day supply,
the consumers cost for Prozac would be $71: the $12 (generic
co-pay) plus the $59 difference between the cost of the brand-name
and generic. (Please note that the drug prices are current at the
time of printing, but the actual costs may vary over time.)
The redesigned pharmacy plan is structured to provide employees
with a financial incentive to select drugs in the lowest tier possible,
said Mary Smith, director of benefits. We encourage our employees
to talk with their doctors and pharmacists to see if there are less
costly alternatives available.
In addition, be wary of drug manufacturers advertising
campaigns, Smith continued. Just because it sounds impressive
doesnt mean its the best choice. And remember that mail
order offers a 90-day supply for a 60-day co-pay for maintenance
Finally, flexible spending accounts offer a great way to save on
out-of-pocket health care expenses. Employees can reduce their taxes
by setting aside money on a before-tax basis for medical, dental,
prescription and vision expenses not covered by insurance. And in
2004, FSAs can be used to pay for over-the-counter medicines such
as pain relievers, antihistamines, contact lens solutions and cold
Open enrollment packets, which detail cost and eligibility information,
will be mailed out in mid-October. Employees can check their current
benefits selections by visiting http://leo.cc.emory.edu
and using their Emory network ID and password. For questions about
open enrollment, contact a benefits specialist at 404-727-7613.