Drug exclusion cuts $1 million from employer spend in six months

This Fortune 500 manufacturer has approximately 50,000 employees, mostly on the East Coast, and an annual $120 million drug spend. Its generic fill rate (GFR) was not where management wanted it to be.

GFR is the percentage of total pharmacy claims that are filled for generic drugs. Since generic drugs are generally less expensive than brand drugs, every increase in GFR will directly lower drug costs.

Prime conducted a market analysis of the company’s situation, and presented the drug exclusion program as a solution to:

  • Increase GFR
  • Combat drug manufacturer coupons
  • Reduce cost for both members and the plan

This program targeted five drug categories that offer generic alternatives to popular brand-name drugs. These categories include:

  • Doxycycline/minocycline (antibiotics)
  • Insomnia products (used to treat sleeplessness)
  • Nasal steroids (used to treat allergies or common cold)
  • Topical retinoids (most widely used for acne)
  • Topical antibiotics (most widely used for acne)

The results: A potential $5 million savings

Prime estimated the program would save the employer $5 million over three years. In the first six months of 2015, the company saved over $1 million, and achieved a 2.5 percent growth in generic use. The employer is on track for bigger savings ahead. An added bonus — there was little-to-no member disruption.

Next story: Compound drugs continue to hit, and hit hard. 

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