Back in the days when pharmacy was simple, clients had one primary objective in managing their prescription drug plans; increase generic drug utilization.
Many employers, particularly in the Northeast, had Generic Dispensing Rates (GDRs) in the mid 60–70 percent range. Meaning if just six out of 10 drugs being dispensed were generic, the employer was satisfied its employees were using the plan correctly. And if you could somehow get that number to seven out of 10, it was an absolute homerun. After all, every 1% increase in GDR decreases 2% on your plan cost.
Fast forward to 2018 and 80% is the new watermark for an effective plan, with blue collar clients sometimes seeing numbers as high as 85–90%. More brand drugs coming off patent each year (Cialis and Xolair are two big ones this year) and less research and development going into new brand name drugs – with capital moving towards specialty – suggests we may soon be in an environment where 90% is the new normal.
But alas, all that means is employers have one less tool to achieving cost reduction. If the spend is not in the brand category any longer, fewer incremental dollars can be culled from that silo. New times must bring new strategies. Mandatory generic and three-tier copay structures will soon go the way of the dinosaur. All eyes are turning to specialty and that’s where the next generation Rx management solutions must focus.