Study shows Prime Therapeutics NetResults™ exclusion formulary doesn’t lead to more medical use or higher costs

Formularies that drive to lower cost, equally safe, effective drugs also deliver significant savings

March 26, 2019

EAGAN, Minn. – Prime Therapeutics LLC (Prime), a pharmacy benefit manager (PBM) serving more than 28 million Blue Cross and Blue Shield members nationally, recently studied its NetResults™ formulary – a formulary that excludes certain high cost or medically unnecessary drugs – and concluded this formulary was not associated with increasing a member’s total cost of care – whether medical costs, pharmacy costs or medical resource utilization. This is good news because it offers concrete evidence that this exclusion formulary (EF) didn’t lead members to seek additional medical attention when asked to switch medicines.

NetResults is one of Prime’s most powerful tools to deliver total drug management for its clients. Launched in 2017, the formulary gives members access to a sufficient and appropriate selection of medications. At the same time, it removes drugs that are medically unnecessary or at a higher cost compared to other available drugs.

NetResults yields significant pharmacy savings because it doesn’t cover select high cost medications when other clinically supported, lower cost alternatives exist. In fact, in 2017 an internal Prime analysis of pharmacy benefit costs showed total cost savings for lives covered by NetResults ranged from $10 to $14 net per member per month (PMPM).1 Health plan clients who adopted Prime’s NetResults formulary saw a commercial drug trend that was 11 percentage points lower on average compared to clients not using this formulary.

Formulary exclusions originated as a way to help health plans and employers address escalating drug costs. An EF places select medications in a “non-covered” status. These non-covered drugs: 1) are high-cost and have more cost-effective, lower cost alternatives, 2) have equivalent over-the-counter drug options available, or 3) may be medically unnecessary (e.g., hair growth). Individuals needing a non-covered drug may file an appeal. However, concern existed that these formulary restrictions may drive increased medical resource utilization and higher overall costs.

To help address this concern, Prime researchers analyzed commercially insured members within four health plans to assess the impact of an EF on 1) medical costs, 2) pharmacy drug costs and 3) medical resource utilization. The research measured that drug. savings can be achieved, while not increasing medical costs. Prime studied members who were enrolled in the NetResults formulary on Jan. 1, 2017, then compared the full year of 2017 to the previous year (2016) when they were not enrolled in an EF. Researchers also compared these results to a control group of non-NetResults members during that timeframe. Prime found no increase in medical benefit health care resource use (i.e., hospitalizations, emergency room visits or office visits) and no increase in medical costs among the NetResults members compared to the control group.

“This research is extremely valuable because now we have solid evidence showing formularies that drive to more cost-effective drugs and exclude unnecessary or high cost options do not increase medical costs that some payers and employer sponsored health plans may have been concerned about,” said Jon Gavras, chief medical officer, Prime Therapeutics. “For example, in the last few years we’ve seen new drugs marketed that are made from two, inexpensive, over-the-counter medicines, yet manufacturers price them at upwards of $1,000! Eliminating these drugs from coverage, along with other products that show no improved outcomes over less expensive options, is an effective way we can help plan sponsors and members keep their drug spending in check.”

“It’s important to study how benefit changes affect real world outcomes,” said Steven Champaloux, principal data scientist, Prime Therapeutics. “We are encouraged to see that people are not incurring more medical bills because they switched to an equally safe and effective drug treatment.”

This study will be presented at the Academy of Managed Care Pharmacy’s (AMCP) 31st Annual Meeting March 25-28 in San Diego. The AMCP selected this research as a platinum award winner, one of three research abstracts honored with this distinction out of 450 submissions.

The per member per month savings achieved was net of rebates.

Download AMCP research poster

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