What Is The Right Copay Strategy?

January 2024
Crystal Clear Rx clients know that effectively managing the pharmacy benefit involves more than just PBM pricing. Utilization, Drug Mix, and Plan Design also impact the amount of money the Plan spends on their pharmacy benefit program.

Most Plan Sponsors design their pharmacy benefit program so that the Plan pays roughly 75-80% of total pharmacy benefit costs, with the member being responsible for the remaining 20-25%. So, when you look at your quarterly report and compare costs to industry benchmarks, your Plan is being compared to other Plans that fit into this category. If your Plan pays a higher percentage of cost share, your overall costs will probably be higher than industry average.

There may be reasons why an employer group wants to pay a bigger percentage of costs than other employers. And while that is a great benefit for the member, it will increase the plan cost. Copayments are required for a reason: employers want their employees to have some “skin in the game”. They know that if the member is responsible for paying a substantial amount for their drugs, they will tend to be better consumers and will talk to their doctors about lower cost options. Good consumers tend not only to save money for themselves, but also for the Plan.

Groups who set their copayments too low may also see higher utilization, which obviously adds cost to the Plan. Some PBM’s have been sued because their mail order services process and send out refills automatically, and in some cases this leads to members ending up with excess medications. If the member has a sufficient, financial incentive to watch costs, they tend to save money for both themselves and their employers.

But what about very high cost, specialty drugs? Many employers worry that their members may not be able to afford these medications, and so they tend to cover FAR more than 80% of the cost of these medications. That’s okay, but because doctors often tend to write prescriptions for the newest drugs available, Plans may want to be sure that the copay for specialty drugs is sufficient enough to encourage members to discuss lower cost, first line therapies before moving to a very high cost, specialty drug.
CCRx has the expertise to help you develop a cost share plan that encourages good consumer behavior and holds down costs for everyone. Please contact your CCRx representative to discuss your benefit design, and to determine whether copay adjustments may be warranted.

If you have Rx Benefit question(s) please reach a CCRx Consultant.