One of the primary ways to help control prescription drug costs is with drug formularies. A drug formulary is a list of drugs covered by your prescription benefit plan. When providers prescribe medications from this preferred list, it can save members money on out-of-pocket costs and save the plan money as well.
How does a drug formulary work?
Your pharmacy benefit manager (PBM) can help you control costs with a drug formulary that encourages use of less expensive but still clinically proven medications.
All plan members have access to the drug formulary (typically through the member portal), which lists medication classes, names, and availability. Preferred drugs usually will have lower out-of-pocket expenses, while non-preferred options require members to pay a higher copay amount.
The plan provider can educate plan members on their formulary options and encourage them to request that their physician prescribe the preferred medications from the drug formulary when medically appropriate.
How often should a drug formulary be updated?
Drug formularies are reviewed regularly for drug efficacy, safety, and cost, though changes are typically only made once or twice per year unless new drugs are added to market and need to be included in the formulary.
Prescription benefit plans must cover therapeutically appropriate drug options, so drug formularies work to find a balance between limiting drug costs and providing sufficient drug coverage for members.
Which factors determine what is covered and at what level?
Drug formularies usually include multiple tiers of drugs that are used to create copay levels for members.
For example, members will usually see lower copayments for generic drugs than equivalent brand name products because generic medications are cheaper to make. When members need a medication that falls under a higher tier, their copay for those medications will be higher.
Several factors help determine which medications should be in a drug formulary, including efficacy, safety, price, and availability.
How we customize the overall plan to meet your needs
At MaxCare, we offer multiple formulary options plus additional clinical programs to help our clients control their prescription benefit costs while meeting the healthcare needs of their employees.
Are you ready to learn more? Contact us today!