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“The only thing necessary for these diseases to the triumph is for good people and governments to do nothing.”


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

Wednesday, August 16, 2000

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