Take Control of your Drug Plans Runaway costs with Reformulary
You might have been reading a lot of stories about pharmaceutical companies increasing the price of brand and generic drugs tenfold. None more so perhaps than Martin Shkreli, the “Pharma Bro” and former CEO of Turing Pharmaceuticals, who raised the price of Daraprim, a drug used to treat HIV, by 5000%.
But there is more to drug pricing than Martin Shkreli. Laval Quebec based Valeant Pharmaceuticals raised the price of the diabetes pill Glumetza by 800%, after the company had acquired Salix Pharmaceuticals. While talk over Valeant’s business model and practices, and sinking stock price dominated the headlines, the bottom line cost on your drug insurance plan might have seen red ink.
But what if we told you there’s a way to fight back against runaway costs on your employees drug benefits plan without compromising the care you provide them? This is called tiered drug formulary plan. A tiered formulary divides drugs into groups, primarily based on costs. The most generic drugs fall under the first tier and typically come at the lowest cost, while the expensive brand names take the upper tiers – which is partially covered by the employer and partially covered by the employee – or co-pay.
Our friends at Reformulary group conducted a study in 2011 that revealed Glumetza does not provide any added medical benefits to justify the more expensive price over generic brands of metformin. The cost difference between Glumetza, priced at $1.13 per unit, and Health Canada Federally approved alternatives, priced at $0.36 per unit is real – a 318% spread.