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community leaders learn about drug plans
|By TIMOTHY COX
The Daily Standard
Employers need to get a handle on the prescription drug plans they
offer their employees, especially with costs spiraling upward at 15 percent or more
annually, business owners were told this morning.
Tim Culligan, director of pharmaceutical management for Medical Mutual
of Ohio, gave tips on managing prescription drug plans to local business and government
leaders at the Mercer County Community Development breakfast forum. The periodic meetings
hosted by the county economic development office help employers stay in touch with
programs and trends important to business, Director Larry Stelzer said.
Prescription drug plans are difficult to manage simply because many
started out not knowing the facts critical to running a successful program,
Culligan said. For example, administrators of such plans should know the top 25
medications used by members of the plan and also should know the total cost of the program
on an annual basis.
By knowing what drugs are most commonly prescribed to workers,
employers then can take steps to reduce costs, Culligan said. Getting workers to use
generic drugs when available is the single biggest way costs can be controlled, he said.
An average brand name prescription costs $50; its generic equivalent
sells for about $9, Culligan said.
³Generic medications are not second-class drugs,² Culligan said,
noting that the U.S. Food and Drug Administration requires that generic drugs meet
bio-equivalency standards of the name brand. ³If somebody really wants a brand name, they
should be responsible for the costs.²
The use of several brand name drugs like Claritin, Prilosec and others
that use aggressive, direct-to-consumer marketing campaigns, have boosted the use of such
drugs and thus the costs of administering drug plans, Culligan said.
The boom in pediatric medicines, including for allergies, asthma and
attention deficit disorder, also has spurred costs higher. That segment of the market has
seen an 85 percent increase in costs on the last four years, Culligan said. People 19 and
under also account for the largest share of the prescription drug market, he said.
Controlling the costs of a company drug plan is virtually impossible if
administrators donıt know the costs of doing business, Culligan said. Too often, Culligan
said he finds companies that arbitrarily set employee co-pays for drugs at $5 or $10 just
because that is what other businesses are doing. While competition with other companies is
a factor, employers should strive to have co-pays set so they cover between 20 percent and
35 percent of the program cost.
But after cost-cutting, employers must be sure they donıt go too far,
Culligan said. That is because there is some merit to the explosion in recent years of
prescription drugs. Especially in cases of prevention, drugs can be a more affordable way
to handle some problems, he said.
Culligan demonstrated his point by noting that Medical Mutualıs claims
for prescription medication last year were higher than those for in-patient hospital care.
Paying for prescription drugs is far cheaper, than say, emergency room
visits, extended hospital stays or missed days from work, Culligan said.
³Most of all you just have to be an informed employer and an informed
consumer,² Culligan said. ³Prescription drugs is probably one of the most difficult
areas to control and understand.²
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