Patients, not Employers or Insurers, Paying Larger Percentage of Prescription Medication Costs

http://www.kaisernetwork.org/healthpolicy_reports/kp000816.7.html

Wednesday, August 16, 2000

PRESCRIPTION DRUGS
 
     
Faced with "rapidly rising" prescription drug spending, which is climbing at about 15% per year, employers and insurers have increasingly shifted the costs to patients, who "may soon pay even more," USA Today reports. For example, more employers have offered "three-tier" plans -- which divide medications into generics, discounted brand-name drugs and other products -- and charge employees higher copayments for more expensive drugs. According to PCS, a pharmacy benefit management company, the number of patients covered by three-tier plans has doubled in the past year and will likely double again this year. In a large study of American companies, Express Scripts, another pharmacy benefit manager, found that three-tier plans cost employers less than traditional packages over a one-year period. While prescription drug spending rose 8.5% for firms using three- tier plans, it jumped 31% for companies offering traditional plans. Study author Brenda Motheral attributed the savings to higher employee contributions, adding that employees with three- tier plans used fewer prescriptions. In addition to the increased use of three-tier plans, some employers may require workers to pay a percentage of drugs costs, ranging from 10%-50% or higher, while others may add a "fourth tier," in which patients would pay the full cost of certain medications. In addition, a study conducted by consulting firm Scott-Levin showed that in the past year, average copayments for prescriptions also have risen, climbing from $6 to $7 for generics, from $12 to $14 for brand- name medications and from $26 to $29 for third-tier drugs (Appleby, USA Today, 8/14).

Kaiser Health Policy Report