Blues Execs Share Strategies for Managing Generic Drug Inflation in AIS Newsletter

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Executives at two Blue Cross and Blue Shield Plans and a Blues-owned pharmacy benefit manager share some of the strategies Blues plans are using to mitigate the financial impact of generic drug price inflation in the July issue of Atlantic Information Services’ The AIS Report on Blue Cross and Blue Shield Plans. The AIS Report is not affiliated with the Blue Cross and Blue Shield Association or its member companies.

Incentivizing the use of generic drugs has been an easy way for plans to keep pharmacy costs under control, with discounts as much as 80% or 90% off the prices for the brand-name products. But now that generics are experiencing record rates of inflation, health insurers need to act to mitigate the financial impact of these high-cost generic drugs. The July issue of Atlantic Information Services, Inc.’s (AIS) The AIS Report on Blue Cross and Blue Shield Plans examines the strategies Blues plans have been employing to manage the issue. Published independently by AIS, The AIS Report on Blue Cross and Blue Shield Plans is not affiliated with or sponsored, endorsed or approved by the Blue Cross Blue Shield Association or any of the independent Blue Cross and Blue Shield companies.

Steve Johnson, senior health outcomes director at pharmacy benefit manager Prime Therapeutics LLC tells The AIS Report that tactics it is considering or implementing include “developing new cost-share tiers for high-cost and low-cost generics, increasing the use of preferred pharmacy networks and implementation of utilization management programs or exclusion strategies targeting high-cost generics.” Owned by more than a dozen nonprofit Blues plans, subsidiaries or affiliates of those plans, Prime coordinates care for 26 million members. Generic prescriptions represent well over 80% of all prescriptions, Johnson says.

Executives at Blues plans in Tennessee and New Jersey tell The AIS Report that they will be actively monitoring generic drug prices. “We will continue to closely monitor generic drug pricing to provide the best care and value to members,” Robert “Ned” Giles, Jr., Pharm.D., manager of formularies at BlueCross BlueShield of Tennessee says. “In some cases, this could mean particular generics either aren’t added to our formulary, or some could be removed if there are alternative products with more reasonable pricing.” Monitoring supply and pricing is critical, Patrick Gill, director and chief pharmacy officer for Horizon Blue Cross Blue Shield of New Jersey, tells The AIS Report. “In some cases where a therapeutic alternative is available, we will consider utilization management strategies to encourage utilization of lower-cost alternatives. Where permitted, we consider new cost-share tiers for high-cost and low-cost generics, increasing the use of preferred pharmacy networks and implementation of utilization management programs.”

Visit http://aishealth.com/archive/nblu0715-02 to read the article in its entirety, including a look at some of the reasons why generic inflation has skyrocketed.

About The AIS Report on Blue Cross and Blue Shield Plans
The AIS Report on Blue Cross and Blue Shield Plans delivers timely news and insightful analysis of new products, market share, strategies, conversions, financing, profitability and strategic alliances of Blue Cross and Blue Shield plans, which are major players in every U.S. health insurance market. The 12-page monthly newsletter is designed for plan managers and others who consider BCBS plans to be partners or competitors. Visit http://aishealth.com/marketplace/ais-report-blue-cross-and-blue-shield-plans for more information. A thoroughly objective publication, The AIS Report on Blue Cross and Blue Shield Plans is published independently by AIS and is not affiliated with or sponsored, endorsed or approved by the Blue Cross and Blue Shield Association or any of the independent Blue Cross and Blue Shield companies.

About Atlantic Information Services
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.

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Jill Brown, Executive Editor
Atlantic Information Services
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