Jan 28, 2012

Over-the-Counter Drug Coverage (Self Help)

One of the more significant changes in the industry over the past five years has been the move by some plan sponsors, including many employers, to cover over-the-counter (OTC) medications under the pharmacy benefit. Recognizing the market potential, some pharmaceutical manufacturers have shifted particular medications directly to OTC status, creating a broader range of drug therapies that provide valuable therapeutic benefits at much lower costs. Allergy medications, pain relievers, including nonsteroidal anti-inflammatories (NSAIDs) for arthritis, proton pump inhibitors (PPIs) for acid reflux, and agents for migraine relief are just some of the examples of medications now available as OTCs. The government has helped to pave the way for OTC coverage under a health plan with the 2003 Guidance from the Internal Revenue Service stating that employers can reimburse for OTC drugs with pretax funds, such as FSAs. Under most OTC benefits, members will pay the lowest copay, typically $5 to $10. OTC programs also typically cover a more lengthy supply of drugs (e.g., 42 doses for a PPI drug versus 30 to 34-day supply for a branded or generic version). Combined with strong member education on the therapeutic value of such products, OTC programs can help to encourage the use of the lowest cost medications possible within a therapeutic category. OTC coverage works particularly well within a mail service program, allowing the PBM to better track utilization and possible drug interactions, while providing an even more cost-efficient product for members. In addition, a key component for an effective OTC program is strong physician involvement. Pharmacists and medical directors within PBMs can again play an important role in this effort by helping to coordinate development and distribution of appropriate and relevant educational materials to prescribers.
The potential value of an OTC program is clear. For example, current estimates suggest that the cost to treat migraines over a 30-day period using an OTC product versus the newest prescription medication is $10 per member per month (PMPM) for the OTC versus $175 PMPM for one of the newest prescription migraine products. For many migraine sufferers, the OTC medication will provide the necessary relief, thus saving the plan sponsors significant dollars. Clinical pharmacists and medical directors within PBMs can work with physicians and plan members to provide education on how to identify warning signs for migraines, appropriate OTC options and when to seek physician support and non-OTC options. This same approach can be used for other OTC medications as well.
While not all plan sponsors require a prescription to secure coverage for OTCs, many pharmacists believe that prescriptions are important for some categories of medications. For example, individuals using PPIs—whether OTC or prescription—must be carefully monitored to prevent progression of the disease and other side effects. Requiring a prescription before payment is made will ensure that physician and pharmacist oversight is given.
Some PBMs are working with their customers to develop a "step therapy" approach to OTC drug benefits. This has the potential to provide significant cost savings to employers. There are a wide selection of OTC options for popular therapeutic categories including NSAIDs, asthma and allergies. An experienced PBM can work with the employer and physicians to develop programs highlighting OTC options.
PBMs with contracted networks of pharmacies can institute electronic edits that would alert pharmacists to instances where OTC options are appropriate. The pharmacist can then contact the physician, and, if approved, move from a prescription to OTC medication. This approach is also known as "first line" therapy and has produced significant savings for many plan sponsors. Under this approach, the patient tries the first line therapy (often an OTC or generic) first and if there is not an appropriate response, moves up to a higher dosage or branded medication. When combined with education and physician and PBM oversight, such programs can achieve financial savings while ensuring patients access therapies that address their needs.
Physicians and PBM pharmacists caution that just switching to an OTC does not guarantee savings—particularly when its impact on pharmacy and medical expenses are considered. The key is to analyze the most heavily utilized therapeutic categories, determine if there are appropriate OTC options, and include those OTCs as one choice, while also offering generics and a branded option on the formulary. This will enable physicians and patients to select the drug that will provide the optimum value. Involving the PBM in the decision as to which drugs need prescriptions and how best to incorporate an OTC benefit can ensure that plan members and the plan sponsor secure the best cost and outcomes from the benefit design.


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