CASE STUDY
Background
A labor union of civil servants and retirees in a large US city was burdened by high prescription medication costs for its members. A self-insured entity, the union’s annual drug spending approached $1.9 million, roughly two-thirds of which was attributable to 40 brand-name medications. In considering methods of cost containment, union leadership requested that National Health Innovations (NHI) estimate its cost to provide medications using its global mail order program.
Methodology
NHI obtained from the union’s benefits director cost data on approximately 200 medications. The data included drug name, class, number of prescriptions, and retail price (or cost) per the union’s pharmacy benefit manager. NHI researchers validated the data by ensuring costs were within the bounds of prices identified by a commercial drug-pricing database. They then generated prices for the union’s 40 most common medications from NHI’s medication-services provider, which negotiates import contracts with tier-one pharmacies in the US, United Kingdom, Australia, and New Zealand, compared NHI prices to those provided by the union, and calculated gross-dollar and percent differences. All calculations were based on equivalent prescription durations, using a standard of 90 days as the common metric, and comparable medication types (i.e., brand name, generic, branded generic.)
Findings
The total cost of the 40 most-prescribed medications on the union’s formulary was $1,269,257. NHI’s estimated cost for the same medications was $254,110. This represents an 80% discount from the union’s current pharmacy benefit manager. A negotiated per-member-per-month (PMPM) fee to participate in NHI’s program would raise the total cost minimally, maintaining overall savings in the 72%-75% range.
Figure 1. Costs by Medication Group: Current PBM (retail cost) v. NHI Prices
Table 1. Gross Dollar Differences and Percent Savings: Current PBM V. NHI
| Cardiovascular | 203 | $2,68,144 | $58,331 | 78% |
| ELIQUIS | 88 | $91,168 | $26,068 | 71% |
| XARELTO | 76 | $1,56,636 | $27,210 | 83% |
| MULTAQ | 15 | $20,340 | $5,052 | 75% |
| Diabetes (Type 1 & 2) | 191 | $2,05,396 | $46,122 | 78% |
| JANUVIA | 50 | $86,150 | $22,606 | 74% |
| JARDIANCE | 37 | $78,662 | $13,895 | 82% |
| INVOKANA | 19 | $40,584 | $9,621 | 76% |
| Depressive & Anxiety Disorders | 142 | $1,78,876 | $26,678 | 85% |
| LATUDA | 22 | $74,756 | $12,140 | 84% |
| REXULTI | 19 | $95,760 | $8,336 | 91% |
| VIIBRYD | 11 | $8,360 | $6,201 | 26% |
| High Blood Pressure | 142 | $9,268 | $3,628 | 61% |
| LISINOPRIL | 28 | $1,708 | $784 | 54% |
| LOSARTAN | 24 | $2,376 | $537 | 77% |
| EXFORGE | 12 | $5,184 | $2,306 | 56% |
| Cholesterol | 103 | $28,380 | $11,114 | 61% |
| ATORVASTATIN | 57 | $20,690 | $8,615 | 58% |
| ROSUVASTATIN | 17 | $6,970 | $2,306 | 67% |
| SIMVASTATIN | 9 | $720 | $193 | 73% |
| Asthma | 84 | $22,670 | $8,649 | 62% |
| ADVAIR DISKUS | 24 | $7,560 | $3,481 | 54% |
| MONTELUKAST | 17 | $4,779 | $470 | 90% |
| SINGULAIR | 13 | $10,331 | $4,698 | 55% |
| Digestive & GI disorders | 73 | $1,25,337 | $25,805 | 79% |
| OMEPRAZOLE | 23 | $2,070 | $617 | 70% |
| XIFAXAN | 17 | $1,06,250 | $21,401 | 80% |
| PANTOPRAZOLE | 13 | $17,017 | $3,787 | 78% |
| Men's health | 69 | $63,668 | $11,796 | 81% |
| SILDENAFIL | 39 | $44,435 | $4,322 | 90% |
| CIALIS | 14 | $12,198 | $6,449 | 47% |
| TADALAFIL | 9 | $7,035 | $1,025 | 85% |
| Infectious diseases | 45 | $1,49,105 | $12,067 | 92% |
| ATRIPLA | 14 | $1,25,552 | $10,280 | 92% |
| VALACYCLOVIR | 6 | $1,943 | $512 | 74% |
| VEMLIDY | 5 | $21,610 | $1,275 | 94% |
| Skin conditions | 42 | $1,13,095 | $29,611 | 74% |
| OTEZLA | 13 | $90,519 | $27,389 | 70% |
| ACITRETIN | 6 | $16,356 | $1,684 | 90% |
| TACLONEX | 4 | $6,220 | $537 | 91% |
| COPD | 39 | $41,720 | $8,120 | 81% |
| SPIRIVA | 16 | $28,672 | $4,883 | 83% |
| TRELEGY ELLIPTA | 7 | $6,363 | $1,690 | 73% |
| DALIRESP | 5 | $6,685 | $1,548 | 77% |
| Thyroid conditions | 32 | $2,035 | $1,027 | 50% |
| SYNTHROID | 11 | $2,035 | $1,027 | 50% |
| Arthritis | 32 | $16,534 | $2,063 | 88% |
| MELOXICAM | 13 | $1,394 | $244 | 82% |
| HYDROXYCHLOROQUINE SULFATE | 9 | $1,699 | $483 | 72% |
| ARAVA | 3 | $13,440 | $1,336 | 90% |
| Women's health | 30 | $7,263 | $1,735 | 76% |
| NUVARING | 9 | $1,755 | $588 | 66% |
| PREMARIN | 5 | $2,940 | $730 | 75% |
| PREMPRO | 3 | $2,568 | $417 | 84% |
| Seizures & Epilepsy | 23 | $17,614 | $4,762 | 73% |
| KEPPRA | 10 | $11,530 | $2,961 | 74% |
| GABAPENTIN | 5 | $435 | $121 | 72% |
| LAMICTAL | 3 | $5,649 | $1,680 | 70% |
| Other | 75 | $20,153 | $2,605 | 87% |
| MESTINON | 6 | $12,444 | $836 | 93% |
| VESICARE | 4 | $4,648 | $891 | 81% |
| LUMIGAN | 6 | $3,061 | $878 | 71% |
| Total | $12,69,257 | $2,54,110 | 80% |