Zero increase in prescription drug spending with generic promotion programs

06/03/05

ST. LOUIS, JUNE 7, 2005 – Prescription drug spending stopped its upward trend in 2004, with no year-to-year increase, for sponsors of drug benefit programs that adopted two or more cost-management programs, according to the 2004 Express Scripts Drug Trend Report released today.

The cost-management programs adopted by clients of pharmacy benefit manager Express Scripts typically required consumers in their drug-benefit plans to use a low-cost, equally effective generic first before stepping up to a higher-cost brand drug.

Use of this cost-management program, called step therapy, has nearly tripled among the employer, managed care, government and labor union clients of Express Scripts in just three years, covering 13 million consumers, up from 4.5 million in 2002. This high rate of adoption has helped to elevate Express Scripts' generic dispensing rate to 54% -- best among the nation's pharmacy benefit managers.

"Step therapy programs are proven tools that lower prescription-drug costs for benefit sponsors and for patients in the form of lower copayments, without compromising health outcomes," said Brenda Motheral, vice president of research and trend management, Express Scripts.

One of the first step-therapy programs introduced by Express Scripts involved the COX-2 anti-inflammatory drugs and required use of a generic non-steroidal anti-inflammatory drug (NSAID) before brand-name NSAIDs like Celebrex or Vioxx were used.

Adoption of the COX-2 step-therapy program rapidly accelerated in 2002 after Express Scripts presented award-winning research at its annual Outcomes Conference documenting that COX-2s were over-prescribed. Now, the company offers 22 step-therapy programs and a sponsor using most of the programs can reduce overall drug costs by 10 percent.

Express Scripts offers benefit sponsors a variety of other programs aimed at encouraging consumers to choose lower-cost, therapeutically equivalent generic drugs.

For example, Express Scripts offers plan sponsors its High Performance Formulary, a comprehensive, generics-based formulary that is built around generics and low-cost brands. When implemented with the right plan design, the formulary has demonstrated the ability to help benefit sponsors dramatically increase their generic fill rates by as much as 15 percentage points in the first year.

Express Scripts also offers GenericsWorkSM, a generics-focused trend-management tool that allows plan sponsors to improve cost savings without shifting costs to members. Benefit sponsors that implement GenericsWork can increase their generic fill rate up to 70% or more and keep drug spending increases to less than 5% for the succeeding three years – backed by guarantees from Express Scripts.

Also, using Zero Dollar Copay, Express Scripts clients make it possible for covered employees to have their prescription copayment waived for six months by trying lower-cost generic drugs for certain therapy classes. The Pharmacy Benefit Management Institute (PBMI) recently awarded its 2005 Rx Benefit Innovation Award to Express Scripts for Zero Dollar Copay.

Express Scripts' new CoreRx program allows active management of therapy classes that contain brands expected to go generic or over-the-counter (OTC) in the near future by excluding me-too drugs and higher-cost brands with low market share. Clients using CoreRx choose which classes to target. CoreRx then funnels utilization in these drug classes to OTCs, generics and low-cost brands. The result is a step-by-step process that results in a high-performing formulary.

More than five million Express Scripts members are now in plans using CoreRx. On average, the generic fill rate for plan sponsors using CoreRx exceeded 60% by the end of 2004.

Express Scripts, Inc. (Nasdaq: ESRX) is one of the largest pharmacy benefit management (PBM) companies in North America, providing PBM services to over 50 million patients through facilities in 13 states and Canada. Express Scripts serves thousands of client groups, including managed-care organizations, insurance carriers, third-party administrators, employers and union-sponsored benefit plans.

Express Scripts provides integrated PBM services, including network pharmacy claims processing, mail pharmacy services, benefit design consultation, drug utilization review, formulary management, disease management, medical and drug data analysis services, and medical information management services.

The Company also provides distribution services for specialty pharmaceuticals through its Specialty Distribution subsidiary. Express Scripts is headquartered in St. Louis, Missouri. More information can be found at http://www.express-scripts.com, which includes expanded investor information and resources.

Source: Eurekalert & others

Last reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
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