Choosing the Right Prescription: A Guide to Customizing Your Pharmacy Benefit Plan

Choosing the Right Prescription: A Guide to Customizing Your Pharmacy Benefit Plan

With healthcare costs on the rise and the need for tailored solutions more apparent than ever, it’s essential to have a robust guide to customize your pharmacy benefit plan. This comprehensive approach ensures that the needs of self-insured employers and their employees are met effectively while managing costs intelligently. 

Customizing Plan Design Options: The Foundation of Effective Benefits

The foundation of any effective pharmacy benefit plan lies in its design options. These can be tailored to fit the unique needs of each employer and their workforce. Member cost share and copay tier structures are traditional levers used to control costs and influence medication utilization. By adjusting these elements, self-funded employers can create a balanced plan that promotes affordability and accessibility for employees while managing the plan’s overall expense.

Clinical Considerations: A Key to Cost-Effective Care

In the pursuit of balancing cost containment with the essential need for effective medications, clinical considerations become a pivotal aspect of any pharmacy benefit plan. Strategies like prior authorizations, step therapy, and quantity limits not only serve as cost-saving measures, but they also ensure that the prescribed medications adhere to evidence-based standards. Let’s explore how these tools can be judiciously applied to foster a cost-effective care approach without compromising patient health outcomes.

Prior Authorizations: Ensuring Medical Necessity and Cost Efficiency

Prior authorizations are a vital component in pharmacy benefit plans, acting as a form of checks and balances. This process involves the healthcare provider obtaining approval before a medication is dispensed to the patient. The aim is to verify that the prescribed medication is medically necessary for the patient’s condition, in line with the latest clinical guidelines and is the most cost-effective option available.

By implementing prior authorizations, plans can avoid unnecessary medication use, reduce the risk of adverse drug reactions, and encourage the use of medications that provide the highest value. This step also helps in avoiding the premature use of expensive specialty drugs when equally effective lower-cost alternatives are available, thus optimizing the allocation of healthcare resources.

Step Therapy: Encouraging the Use of Cost-Effective Alternatives

Step therapy is another method used to control costs without compromising care. This approach requires patients to try one or more specified, lower-cost medications before the plan approves a more costly drug. These initial medications are typically generic or preferred brand-name drugs that have been proven effective for most patients with the same condition.

Step therapy not only reduces immediate healthcare costs but also contributes to long-term savings by promoting the use of medications that provide similar or even better therapeutic outcomes at a lower price point. Additionally, it fosters the use of a more methodical treatment progression, which can be beneficial for patient safety and treatment efficacy.

Quantity Limits: Controlling Consumption and Costs

Quantity limits are employed to manage the cost and usage of medications by limiting the amount of a drug that can be dispensed during a specific time frame. This ensures that the prescribed dosage aligns with standard treatment protocols and helps prevent wastage due to unused medication. It also serves as a deterrent to overutilization and potential medication abuse, particularly for controlled substances.

By setting quantity limits, pharmacy benefit plans can better manage inventory, reduce the chance of medication errors, and lower the risk of drug interactions, ultimately protecting patient health and reducing overall costs.

Managing New Medications and Combination Products

With the constant influx of new medications and combination products into the market, staying abreast of emerging therapies is a significant challenge. A rigorous and ongoing review of these new entrants is essential. This evaluation not only assesses the clinical value and safety profile of new drugs but also their cost implications for the benefit plan.

Combination medications—drugs that include two or more active ingredients in a single dosage form—often come with higher price tags and may not always provide added clinical benefit over their single-ingredient counterparts. The decision to include such medications in a pharmacy benefit plan should be based on a careful consideration of their clinical efficacy versus their cost. Excluding high-cost, low-clinical-value combination drugs can help maintain the integrity of the formulary and preserve the sustainability of the benefit plan.

Managing Cost with Generic Medications

One of the most effective strategies for managing pharmacy benefit costs is through the utilization of generic medications. Generic drugs are the bioequivalent of brand-name drugs, meaning they contain the same active ingredients and are just as safe and effective. However, because they are not associated with the initial research and development costs that brand-name drugs are, generics are offered at significantly lower prices. Encouraging the adoption of generics is a key element in managing healthcare costs while maintaining high standards of care.

The Role of Generics in Cost Management

Generic medications can result in significant savings for pharmacy benefit plans without impacting the quality of care received by members. For example, once a patent for a brand-name drug expires, generic versions enter the market at competitive prices, which can be as much as 80-85% lower than their branded counterparts. The widespread use of these cost-effective alternatives is essential for keeping the pharmaceutical expenses of a benefit plan in check.

Educating Employees on the Value of Generics

Employees often believe that higher-cost brand-name drugs are more effective, which is not the case. Effective communication strategies can inform and reassure employees about the FDA’s rigorous approval process for generic drugs, ensuring that they meet the same standards of quality as brand-name medications. Understanding that generics provide the same therapeutic benefits at a lower cost can lead to a greater willingness to choose these alternatives over more expensive options.

Generic Tiering in Copay Structure

Another effective tool for managing costs with generics is the implementation of a tiered copay structure within the pharmacy benefit plan. This structure encourages the use of generics by assigning them to a lower copay tier, making them the most financially attractive option for employees. Higher copay tiers can be reserved for brand-name drugs or non-preferred generics, which provides a clear incentive for members to opt for more cost-effective medications.

Through these tiered structures, members are empowered to make cost-conscious choices while still receiving the medications they need. This not only leads to direct savings for the employee’s out-of-pocket costs but also reduces the overall expenses borne by the employer.

The MaxCare Approach: Tailored Solutions for Cost Management

MaxCare’s approach to pharmacy benefits is rooted in customization. We understand that each company’s culture and financial needs are unique, and our goal is to design a plan that aligns with these specific requirements. MaxCare’s model includes potential cost share and copay tier structures specific to your company, ensuring that the plan resonates with your company’s values and financial goals.

A Layered Approach to Managing Costs

Our layered approach to cost management includes a weekly review of new drugs to the market, ensuring that only medications with proven clinical value are included in the plan. We also focus on excluding high-cost, low-clinical-value combination medications to maintain both quality and affordability.

The MaxChoice solution is another innovative framework that addresses highly utilized medication categories with significant cost differences. This solution empowers employers to set their dollar thresholds for drug review, allowing them to define what constitutes a high-cost medication for their plan.


By leveraging tools such as prior authorizations, step therapy, and quantity limits, and by carefully managing the introduction of new drugs and combination medications, employers and plan administrators can ensure that their members receive medically appropriate care at the most reasonable cost. This strategic approach aligns economic prudence with the paramount goal of patient health, creating a balanced and sustainable pharmacy benefit plan.

Adopting a plan design that actively promotes the use of generics is not just about cost savings; it’s about demonstrating a commitment to providing accessible, high-quality healthcare. As generic medications continue to play an integral role in the pharmaceutical landscape, their effective management remains a cornerstone of a sustainable and responsible pharmacy benefit strategy.

It’s crucial to have a trusted partner who can navigate the complexity of pharmacy benefits. With MaxCare’s tailored approach, you can ensure that your pharmacy benefit plan is both cost-effective and clinically sound. We work closely with you to understand your specific needs, creating a plan that supports your employees’ health and your bottom line.

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