cost increases to an average of 4.4%, the lowest rate of cost increase since 1995, according to research published by the Pharmacy Benefit Management Institute (PBMI).
    The 2009–2010 Prescription Drug Benefit Cost and Plan Design Report reviews data collected from 417 U.S. employers representing 7 million members. The study provides trending information on drug plan design and utilization for retail, mail-service and specialty pharmacy prescriptions. Highlighted below are some of the key findings:

• 96.7% of employers offer access to mail-service pharmacy to dispense maintenance medications used to treat chronic conditions. A total of 17.4% of employers require maintenance medications to be dispensed through mail-service, with nearly 84% of employers using retail pharmacies. This is an increase of 52.3% since 2008. Data show 66.5% of employers using retail pharmacies to dispense maintenance supplies are not restricting dispensing to select pharmacies.
  
• On average, members paid 25.2% of a retail prescription and 19.2% of a mail prescription. There has been little change in these numbers since 2007 when PBMI began capturing these data.
  
• 86.9% of employers with a formulary include multiple
  tiers. Closed formularies have almost disappeared.
  
• Three or more tier plan designs are used by 84.7%
  of employers. As in prior years, the most commonly
  used approach is a three-tier plan design for generics, preferred brands and nonpreferred brands. The trend toward increasing use of more three- and four-tier designs continues for a third year as shown in Table 1.

• Negotiated discounts for retail brand and generic prescriptions continue to increase resulting in the decrease of ingredient costs and dispensing fees. Specialty pharmacy reimbursement for 2009 is similar to retail brand rates with a slightly higher average dispensing fee. Cost sharing data do not show broad adoption of a specialty drug cost sharing tier.
• Generic dispensing rates have increased in both retail and mail since 2008. The range of generic dispensing rates continues to expand as increased numbers of generic drugs become available for medications commonly used by commercially insured drug benefit plans.

The use of multi-tiered cost sharing payment structures creates incentives for members to select the lowest net cost drug that is medically appropriate. When paired with education and clinical management, the rate of increase in prescription drug expenditures slows. Creating an economically sustainable drug benefit is critical as more specialty drugs reach the marketplace.     

Dana Felthouse is president of The Pharmacy Benefit Management Institute (PBMI). PBMI provides research and continuing education to help health care purchasers work effectively with PBMs and other industry professionals to improve pharmacy benefit programs and control costs. Ms. Felthouse can be contacted at dfelthouse@pbmi.com.