July 3, 2018
A Case For Step Therapy
Therapeutic Class Substitutions and Step Therapy
As drug plan costs continue to escalate, plan sponsors are forced to find ways to control costs. One way is to encourage smart shopping and insurance companies are on board designing plans that guide members into the most cost-efficient options.
Therapeutic Class Substitutions
Often, the same health outcome can be derived by following different drug therapies. That is to say that taking drug A, B, or C will lead to the same result, albeit at different costs. By now, you have all heard about substituting brand name drugs with their lower cost equivalent generics. These drugs share the same medicinal composition, and are generally interchangeable. However, there is another option: using a drug from the same therapeutic class that has an altogether different medicinal composition but yields the same outcome. These drugs are reviewed to ensure that they have the same safety and efficacy of the prescribed drug and may be of a lower cost – even if they may be a brand name.
Instead of narrowly looking at the simple interchangeability of brand and generics for cost savings, the view is being expanded to consider all drug therapies within a classification to find the most cost-effective route to a healthy outcome.
This is why the language in many drug plans is being updated to read something along the lines of “the plan covers the lowest cost alternative therapy, usually a generic”.
Just as not all brand name drugs have a generic equivalent, not all conditions have a therapeutic alternative. Similarly, just as some patients are unable to tolerate a generic drug, some may not tolerate a therapeutic class substitution. Pharmacists are prompted to discuss substitution options with the prescribing physician and the patient before filling the prescription. If a medical reason exists for not substituting the drug, exceptions can be made.
This discussion leads us nicely into another cost savings measure: Step Therapy
Taking the stairs instead of the elevator is one view of step therapy, but the step therapy we want to examine relates to your drug program.
As outlined above, there are a number of different routes that can be followed to achieve the same health outcome. Step Therapy requires a patient to try a lower cost therapy before progressing to the more expensive alternatives.
This type of program does not just save a few dollars here and there; the savings can be fairly significant. Take the case of diabetes, one of the conditions that routinely appear in the top 10 drug categories by amount paid.
The chart below shows five different therapies and the average annual cost per patient (per TelusHealth 2017 data)
Drug Name Average Annual Cost per Patient
While Metformin is by far the lower-cost option, one-third of all new patients were initially prescribed a more expensive alternative. This is an ideal situation for cost-saving via a step-therapy program.
Cost-saving features such as Therapeutic Class Substitutions and Step Therapy are not designed to limit access to required care, but rather to guide patients to be cost-efficient shoppers. Finding the most cost-efficient route to the same health outcome will help to reduce costs not only for plan sponsors, but also for employees who may have a co-payment per prescription.
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