A reference price program is one of the key ways an employer can control costs in their pharmacy plan. But how exactly does it work?
Prescriptions prices vary significantly based on many factors, including the research cost to create the drug, the time it’s been on the market, and if generic options are available. For any specific medical condition, there are often several medications that can be used to treat the condition. And those different medications may have different costs.
Let’s say a patient has asthma and their doctor prescribes an inhaler that has an inhaled steroid and a long-acting bronchodilator. There are quite a few inhalers on the market that fit that description. Some are newer medications that cost more, while others have been on the market a long time so they cost less and have plenty of clinical research to prove their effectiveness.
In this situation, you might structure your pharmacy benefit so that three of the available options are listed as preferred medications. But what if the patient’s doctor prescribes a medication with a higher cost?
With a reference price program, the patient has two options. The first option is for their doctor to substitute one of the lower-cost medications from the preferred list. The second option allows the patient to proceed with the prescribed higher-cost medication, but the cost is shifted to the patient through the copay amount.
Reference price programs such as the MaxChoice program we offer help control prescription costs for the employer while still providing patients a choice in the medications they take. It also offers employees the option of lower-price medications that have been proven safe and effective.
A reference price program is one aspect of structuring your prescription benefit plan that can help with cost containment. Contact us today to discuss customizing a prescription benefit plan to fit your unique needs.