Employers that have taken the same trail as pioneers in Asheville, N.C., and at Pitney Bowes Inc. by reducing or waiving prescription drug copayments for some conditions remain outside the mainstream, experts say.

But there is steady adoption by employers of so-called value-based health plan designs (see charts, page 12). The aim is to reduce overall health care costs by improving patients' adherence to medications, thus preventing chronic conditions from worsening and costing more.

While data is still being gathered to show that overall medical cost reductions result from value-based health plan designs, other studies have shown that patients who have to pay higher copays are less compliant in adhering to their medication therapies.

Another factor affecting employer adoption of waiving drug copays is the weak economy, consultants say.

"There's a little bit of a tug of war going on between those who want people to realize the cost of the medicine they're taking, so they will make conscious choices, and those who believe that when you consider improved overall medical costs and the impact on productivity of drug adherence, those far outweigh the cost of the drugs," said Michael Thompson, a principal at PricewaterhouseCoopers L.L.P.'s employer practice in New York. "It's a balancing act. People are trying to get it right."

In today's economy with budget cuts, "it's a little bit harder to get approval for reducing copays, especially when results are a little bit squishy," said Hitesh Patel, vp of Aon Consulting's pharmacy practice in Chicago.

Copays range from $30 to $50 for brand name drugs and $7 to $15 for generics, he said.

Some employers have limited their investment in this strategy by waiving copays only for generics, Mr. Patel said. "Typically, what we tell them is to start out small, say with diabetes and asthma drugs, and expand as they see results and feel more comfortable," he said.

Although human resources and benefits executives "get it, because they live with this every day," convincing senior management to eliminate drug copays "is a difficult sell and more difficult these days. It's one of the most talked-about subjects in pharmacy," said John Malley, national practice leader-pharmacy benefit consulting at Watson Wyatt Worldwide in New York.

While consultants point to outcomes experience by Pitney Bowes and the Asheville Project, now called HealthMapRx (see story, page 12), "there's not a ton of data" on cost savings from reducing or waiving drug copays, said David Dross, national practice leader of Mercer L.L.C.'s managed pharmacy practice in Houston.

"There's evidence out there, but there needs to be more" to convince "the show-me camp in the employer community," said Andrew Webber, president and chief executive officer of the National Business Coalition on Health in Washington. He cited case studies of employers that have adopted the strategy on the Web site of the Center for Health Value Innovation, which Dr. John J. Mahoney co-founded. He also pioneered value-based benefit design that includes waiving drug copayments while at Pitney Bowes.

Five of Mercer's "large, leading-edge clients are working with some version of this," Mr. Dross said.

Several Aon clients have begun reducing or eliminating drug copays, Mr. Patel said.

Watson Wyatt's Mr. Malley said fewer than 25% of his clients waive or reduce drug copays.

Employers that have waived or reduced drug copays for certain chronic conditions include Marriott International Inc.; the city of Springfield, Ore.; Mohawk Carpet Corp.; the state of Colorado; Hannaford Bros. Co.; Procter & Gamble Co.; and SCANA Corp.

"What's helping move along initiatives like this is that employers have already done all the basic things to control costs and they are looking to advanced strategies, such as implementing reduced copays for certain disease states to improve compliance," Mr. Dross said.

"I think the pioneer employers are even more committed to maintaining the strategy of value-based design" during the economic downturn, Mr. Webber said. "This is an arena where you can pursue opportunity for increasing the productivity of your workforce and lowering your cost."

However, consultants said, reducing drug copays is only one part of the strategy.

"Organizations that have adopted an approach like this already have a robust infrastructure in communications and disease management and health improvement initiatives. There's a lot of focused outreach already," Mr. Dross said. "Doing it just as a pharmacy iteration is not going to yield much success. It's got to be part of an overall strategy to improve health."

The strategy of reducing copays is not for every employer, consultants said.

"It's very client specific," Mr. Patel said. "There are certain criteria we look for: significant problems with utilization, where drugs play a significant role in outcomes, and where there is an issue with compliance. In those situations, we suggest (employers) reduce or eliminate copays."

"There are a couple of steps employers have to take in considering the move," Mr. Malley said. "I'm a supporter if the need is there," he said. To establish that need, employers must take "a deep dive into pharmacy claims to determine if gaps in therapy exist or if there is noncompliance."

Employers also should consider the nature of their workforce. Eliminating drug copays might not be sufficient incentive for higher-paid employees, Mr. Malley said.

Employers also must gauge employees' response to communications about cost savings and the importance of taking their medications, he said.