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Managing RX Benefits

SHN has been managing prescription drug benefits since 2004. We are experts in the industry when it comes to educating you and your employees and/or retirees on how to cut costs while maintaining optimum health. Below is a quick scenario on the most recent cholesterol lowering drug epidemic and how SHN can assist your organization.

Drug costs are rising again….
This time in connection with cholesterol reducing brand drugs.


Pfizer has raised the cost of its block-buster drug, Lipitor, by a staggering 25.83% over the past 13 months.  Astra-Zeneca is not far behind — raising the cost of Crestor by 21.52% over the same 13 month period.  Note that both manufacturers raised their respective costs by 12% in a single month — from December 2010 to January 2011.  And while Schering-Plough has only raised the cost of its Vytorin by 12.36% during the last 13 months, such cost inflation is certainly nothing to be ignored.
Here’s a chart summarizing the three drugs’ cost increases, based on the cost of a single tablet of each drug:

Drug Name   AWP 12/09 AWP 12/10 AWP 1/11 % Change 12/09-1/11
Lipitor 10 mg   $3.21 $3.61 $4.04 25.83%
Lipitor 20, 40, 80 $4.58 $5.15 $5.76 25.83%
Crestor — All   $4.30  $4.67 $5.23  21.52%
Vytorin — All $3.92 $4.41 $4.41   12.36%

Given the high usage of cholesterol reducing drugs (the #1 used therapeutic class for most plans), every entity paying for drug coverage is certain to see its total costs soar in the coming months from the above cost manipulations.  Corporate plans, union plans, Medicare Part D plans, federal and state and municipal government plans, and yes, even the insurance companies that provide drug coverage to the above plans.  When brand drug manufacturers inflate their costs by 12% and 25%, everyone’s costs soar.

The SHN Difference

SHN can help by designing and implementing new programs to increase your generic drug usage.
There are several such programs you can try, including any – or all – of the following:

  • A mandatory generic drug program (where a member is required to use a generic drug, or pay the difference in cost between the brand drug and generic drug);
  • A step therapy program (where a member is required to try a generic drug before using the brand); or
  • A prior authorization program (where a member’s doctor must submit certain information to demonstrate the need for a brand drug, or the plan will only cover the generic drug’s cost).

Note: The cholesterol lowering generic drug to which virtually all patients can safely take is simvastatin. Simvastatin should cost you about $0.15 to $0.25 per tablet (depending on the dosage strength, and PBM with which you have a contract).  Needless to say, even 25 cents per tablet of simvastatin is considerably less than the lowest cost cholesterol brand drug, which is Lipitor 10 mg. at $4.04 per tablet.

In today’s marketplace, where brand manufacturers are increasing their costs, it’s imperative that every entity focus on maximizing generic drug usage. Otherwise, you’ll be vulnerable to staggering manufacturer price increases, and you won’t be able to do a thing to control your prescription coverage costs.