HMO pharmacy copay comparison

As payers have been increasingly impacted by rising drug costs, they have become more creative in plan design by introducing different copay tiers and member incentives to change drug purchasing behavior, say industry watchers.

"As pharmacy costs have risen and new products have entered the market-in particular over-the-counter [OTC] and specialty products-and more blockbuster drug classes have generic alternatives, payers are adding additional copay tiers or even waiving copays to achieve desired changes in member behavior," says Dave Borden, principal and co-owner, Pharmaceutical Strategies Group LP (PSG), Irving, Texas.

"We are seeing increasing use of four-tier and five-tier copay plans," Borden says. "A fourth tier is most often used to introduce additional cost sharing to certain high-cost agents. Often these are specialty/bio-tech drugs or in some cases, drugs that have cheap alternatives, and payers are pushing utilization out of higher cost drugs into the lower cost alternatives."

PacificSource Health Plans, a non-profit plan in Eugene, Ore., doesn't offer HMO plans, but the bulk of its copays are four-tier designs, "where specialty drugs have a different copay structure from all the other drugs," says Dennis Rogers, RPh, director of pharmacy services. "The trend is toward reducing copays for generics and addressing specialty drugs separately from the other drugs."

INCENTING MEMBERS

PSG has seen a significant increase in the use of copay waiver or amnesty programs to incent members to try select OTC products, such as OTC PPIs and NSAs, or to switch from a branded product for which there is no direct generic alternative, to a generic for another branded product in that drug class that is therapeutically equivalent.

Another evolution in design is the introduction of coinsurance, often with minimum and maximum copays by tier. "The goal is to reduce the impact of leveraging on drug trend that occurs with flat dollar copays, as well as to help members understand the true cost of a prescription drug with the hope they will make more thoughtful purchasing decisions," Borden says.

-Tracey Walker