Health payer solutions that save money on soaring drug costs

Editor's note: The following is an excerpt from FierceHealthPayer's new eBook,"Payer IT Solutions: Tackling the Toughest Regulatory Challenges." You can download it for free. 

While the annual cost of pharmaceuticals has moderated in recent years, it's likely to remain one of the biggest cost-drivers in healthcare delivery.           

As some plans have narrowed their formularies, others have partnered with outside pharmacy benefit management firms (PBMs) or created subsidiary PBMs. These companies once focused primarily on cutting out the cost added by bricks-and-mortar pharmacies through mail-order prescriptions to health plan enrollees, although they have widened their focus in recent years.

Cigna took matters into its own hands, creating an internal IT tool that analyzes the pharmaceutical usage associated with 31 chronic illnesses and the communications these members have with their physicians. If a patient fails to fill a prescription, for example, the system notifies the patient's physician. Physicians also receive a "clinical data profile" that encourages them to close any treatment gaps, including those involving drug regimens, says Jeffrey Kang, Cigna's chief medical officer. 

The result has been annual pharmacy cost savings of about $1 million, Kang says.

The health payer has also entered into a performance-based pact with Merck, regarding the use of diabetes drugs. Cigna monitors the use among enrollees with type 2 diabetes of two Merck drugs that battle the disease: Januvia and Janumet. 

Result: During the first year of the program, an additional 3 percent of Cigna's diabetic population kept their blood sugar under control, and 4.5 percent more underwent regular testing, while drug usage went up by only marginal amounts. 

Walgreens, the big pharmacy chain, has also developed a program that uses IT to closely monitor oncology patients and their use of medications, dispensing them in smaller increments and prompting a clinician's review in mid-cycle. According to Walgreens officials, oral oncology medications can be wasted because patients may struggle to complete a full month of drug therapy due to side effects or the progression of their disease. 

Given that some cancer therapies can cost hundreds of thousands of dollars, such a program can create savings that range between $2,000 and $4,000 a month for one member. -- To read the full article -- and several others like it -- download our free eBook: "Payer IT Solutions: Tackling the Toughest Regulatory Challenges." 

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