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10/03/02: Area community leaders learn about drug plans
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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