Benefit design differentiates levels of member cost share based on different factors — it’s a smarter way to control rising drug costs, one tier at a time.
Our primary recommendation for 2017— a 5+ tier benefit design — is one of our most powerful tools that can lower your overall drug costs. When you’re ready to step into the ring, know these five points:
- Multi-tier benefit designs are becoming an established way to manage rising drug costs and encourage the use of lower-cost drugs. Some employers are even using 6- and 7-tier benefit designs.1
- A 5-tier design can help you save without compromising care. Basically, it’s a coinsurance or copay model — members pay different copays, with the first tier being preferred generic drugs.
- First tier copay should be equal to or greater than $10. It’s been shown that member behavior is not influenced if cost share in the first tier is below $10.2
- Successful design differentiates levels of member cost share based on:
- Brand preference
- Cost/drug efficacy (value)
- Studies show that prescription abandonment rates for specialty drugs go up when member out-of-pocket goes over $250.3
5-tier design is just one of the smarter tools we offer to fight rising drug costs — contact your health plan representative to learn more.
1. Yahoo! Finance. (June 2,2016.) Employers Use of Multi-Tier Pharmacy Benefits Continues to Rise. http://finance.yahoo.com/news/employers-multi-tier-pharmacy-benefits-100000401.html
2. Yuan, Y. and colleagues. Ph.D. dissertation. University of Minnesota. June 2008.
3. Catherine I. Starner, Kevin Bowen, Yang Qiu, Patrick P. Gleason. “Association of specialty drug prescription abandonment with increasing member out-of-pocket expense.” Prime Therapeutics, LLC, March 2014.