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March 2, 2021
What difference does a formulary make? You might be surprised. In the case of one group, with the adoption of an Asuris formulary, the difference was about $13.75 per member per month (PMPM) in savings.
Formularies (also called covered-drug lists) are an important element of a well-rounded benefits plan. Employers should evaluate all their options based on their employee population and financial goals.
We can help with that. Asuris offers three primary formularies and can apply cost and quality levers tailored to meet specific needs. With more than 20 registered pharmacists on staff, we stand ready to demonstrate the impacts of different formularies on employees and overall costs.
You and your groups might start with their goals to reduce costs and increase ease of access for employees. Formularies generally fall along a continuum from least restrictive to most restrictive, along with associated costs and impacts on employee experience.
An open formulary, while offering a rich benefit to employees, may lead to high drug spend. A closed formulary offers a more discerning list of covered drugs based on clinical value and cost. A formulary that is too restrictive may prevent employees from receiving effective and necessary treatment. A more restrictive formulary may also lead to higher administrative costs due to increased exception requests from employees.
What you might be looking for is a Goldilocks formulary–one that provides access to safe and effective treatment while at the same time controlling costs.
For example, using the optimal balance of access and cost, we provided a new, mid-sized group an average of $13.75 PMPM savings in pharmacy costs compared to their previous carrier through implementation of our Standard formulary.
The options don’t end with the formulary decision. Your groups can incorporate levers into their formulary to further guide employees to appropriate and cost-effective treatment and therapies.
For example, our High-Cost Drug Exclusion (HCDE) list excludes coverage of egregiously high-priced drugs that have low-cost alternatives or combination products where the individual products are available at a much lower cost. Our 2020 data shows incorporating the HCDE into the Standard formulary yields a savings that averages $1.22 PMPM.
Groups that choose our Standard or Core formulary may add a three-, four- or six-tier benefit structure to encourage preferred products and share a greater portion of the cost with employees.
Finally, utilization management, embedded in all formularies, helps steer employees to clinically appropriate, cost-effective drugs.
All our formularies are considered closed, meaning they are actively managed by our pharmacists for the highest clinical quality and value.
Our Standard formulary provides the broadest drug coverage. It focuses on access to safe and effective medications with minimal employee friction. We manage costs in the Standard formulary through preferred product placement, utilization management developed through our evidence-based medicine (EBM) process, and plan benefit design.
The Core formulary is aggressively managed and includes a narrower list of covered drugs. It drives employees to lower net-cost drugs while continuing to follow the clinical integrity of our high-quality management strategy. This formulary is designed for employers that are more focused on cost savings. Their employees still benefit from the value of our robust formulary management. And, employers may see ingredient cost savings of $6 to $8 PMPM, primarily due to excluding coverage for drugs that can be purchased over the counter.
Our ACA-compliant formulary is a highly managed formulary that meets state and federal regulatory requirements for fully insured filings. This formulary covers drugs that meet the same clinical criteria of the Standard and Core formularies.
Table 1: Our formularies | Standard Commercial | Standard + HCDE list | Core | ACA -compliant |
|---|---|---|---|---|
Formulary model | Closed | Closed | Closed | Closed |
Member experience | Provides broad drug access within the bounds of clinical efficacy and cost | Provides broad drug access but limits access to specific high-cost drugs with lower-cost alternatives | More limited access to drugs; excludes drugs available over the counter | Limits drug access and adheres to state benchmark requirements |
PMPM cost | $$$ | $$ | $$ | $$ |
Potential for administrative costs (exception requests) | $$ | $$$ | $$$$ | $$$ |
Proton pump inhibitors (PPIs) are commonly used drugs for gastric reflux and are widely available as brand-name, generic, and over-the-counter (OTC) products. Coverage for these medications will depend upon the formulary chosen.
As shown in Table 2 below, formulary choice affects the continuum of coverage and cost for Dexilant, a commonly used brand-name PPI.
Formulary | Standard | Standard with HCDE | Core |
|---|---|---|---|
Coverage | Dexilant covered at non-preferred brand tier | Dexilant not covered; generic options covered at generic tier | Dexilant not covered; generic options not covered; over-the-counter options available for purchase |
Group cost implications | $287* for a 30-day supply | $3 - $15* for a 30-day supply | No group cost implications |
*Average Wholesale Price
Pharmacy benefits are often the most frequently used benefits a health plan offers. Our Customer Service team is available 24/7 to assist members. No matter which formulary your groups choose, you can be sure their employees will receive evidenced-based drug coverage at the best overall value.
Our options offer groups the flexibility to shape their prescription benefit plans to meet their health care goals for quality, cost and employee experience to land on a formulary that’s just right.