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Reducing pharmacy benefits costs with generics program


Style Crest Enterprises Inc., a Freemont, Ohio-based manufacturer and distributor of building products, has reduced its pharmacy benefit costs by 11% over the past 12 months even after picking up the entire tab for generic maintenance medications for its 350 employees.

Style Crest offers ECB L.L.C.'s Rx "n Go program as a voluntary benefit alongside Style Crest's other pharmacy benefit program, which is administered by Cigna Corp., said Jennifer Kranz, director of human resources.

Under the Cigna program, employees are required to pay $15 or 15% of the cost of generic drugs up to a $75 cap, or $30 or 30% of the cost of brand-name drugs up to a $150 cap. Style Crest also requires employees to fill maintenance medications via mail-order after three fills at the pharmacy. Otherwise, they pay 70% of the cost of the drug.

By contrast, under the Rx'Go program, employees can receive 90-day supplies of up to 1,200 generic drugs at no cost to them.

Ms. Kranz said Style Crest already had a higher-than-average generic utilization rate of approximately 78%, compared with the rest of Cigna's book of business, which has a generic utilization rate averaging 69%.

But Style Crest is paying less for generics purchased from Rx "n Go than it was paying via Cigna's pharmacy benefit manager, resulting in a $50,000 savings last year alone.

Prior to implementing the Rx "n Go program two years ago, “we did an analysis of the generic maintenance drugs, how many scripts, how much we paid. We knew that we wouldn't move everybody, but we saw the potential for a 50% savings on our generic drug spend,” Ms. Kranz said.

To persuade employees taking brand-name drugs to switch to generics via Rx "n Go, Style Crest provided employees with price comparisons showing how much they would save by getting generic equivalents for free via Rx "n Go's mail-order service vs. copayments for brand-name drugs either at the pharmacy or via Cigna's mail-order service.

Prior to implementing the program, Ms. Kranz said Style Crest made sure that Cigna was aware of it.

“We were just moving to Cigna the year that we put Rx "n Go in, so in our contract conversations we made Cigna aware of it,” she said, adding that they did not object since “the Cigna drug spend is still substantially more than the Rx "n Go spend.”

In fact, “they are so good about it that if an employee sends their prescription to Cigna by mistake and calls to inquire about why they had to make a copayment, Cigna refers them to Rx "n Go,” Ms. Kranz said.

Cigna declined to comment.

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