8 Best Practices for Using Drug Alternatives to Create Drug Cost Savings

In a recent article, we compared the drug alternatives information provided by seven Pharmacy Benefit Managers (PBMs) to understand how useful that information is for supporting prescription decisions.

We noted that there are several areas where improving the data provided or the mechanism for communicating alternatives, can save all stakeholders – physicians, patients, pharmacists, and PBMs – time and money.

In this article, we lay out best practices for PBMs to adopt when providing alternatives information. Our hope is that by adopting these best practices, PBMs will take a step forward in improving patient outcomes, and greater savings for all stakeholders.

Why Provide Drug Alternatives Information?

Alternatives are in place to help providers and their patients choose the optimal medication that meets the patient’s needs. Available options may vary from one insurance plan to another based on the patient’s cost for the drug (copay or drug cost if a deductible has not been reached) and prior authorization requirements. Alternatives offer a method for PBMs to suggest to providers and patients other more preferred medication options.

Before we delve into the best practices themselves, let’s take a quick look at why providing alternatives information within formulary  or  real-time pharmacy benefit information in EHRs and in patient facing tools is so critical.

According to a CoverMyMeds survey, as many as 50% of patients abandon prescriptions because of price.

Access to alternatives information, lets doctors know what other more cost-effective or covered options are available. This can slash prescription abandonment and potentially save PBM clients over $167 per member per year1. In addition, it reduces patient out-of-pocket drug costs.

Best Practices for Providing Alternatives Information

Below are the best practices PBMs can adopt to increase their savings on drug costs as well as reduce patient costs. 

1. Systematically identify all opportunities to provide alternatives
Directing physicians to similar but lower cost drugs is an unparalleled opportunity to create patient and payer savings. Yet many PBMs only provide alternatives for only a small subset of drugs.

PBMs can look among groups of drugs with the same indications to identify which drugs have alternatives that can save the patient money on their copay or out-of-pocket costs. A process should be established to identify drugs that have a better formulary alternative or a lower copay option in the therapy area.

Alternatives should be included in formulary data, in real-time pharmacy benefit data sent to providers’ EHRs, and in patient portals or plan websites. It is important that alternative data be consistent across these areas so as not to inadvertently create any confusion.

2. Identify relevant alternatives with appropriate strengths
All drugs in the same classification are not always alternatives for each other at the selected dose.

For example, the statin Livalo available in a 4 mg tablet has available alternatives in the market but none are 4 mg.

To help doctors identify other options, therapeutically similar doses should be included in alternatives drug listings.

3. Drugs not covered should have alternatives (whenever possible)
When a drug is not covered by the PBM there should be alternatives listed for the drug.  This can’t be done if the entire category of drugs is excluded from coverage (e.g. drugs for hair growth).

For drug classes that do have covered options, PBMs can promote better patient outcomes while saving money by offering alternatives.

4. Prior authorized drugs should include lists of alternatives
Many formulary lists on PDFs and websites include prior authorized drugs with a side-by-side listing of the alternatives. Displaying alternatives is a bit more complicated in EHRs and patient websites. Prior authorized drugs and those with other restrictions like step therapy should have non-prior authorized, relevant alternatives included.

When doctors don’t have access to alternatives for restricted drugs, they are left to guess what options might meet their patients’ needs. For payers, this drives up drugs costs because doctors may select another drug that is less cost-effective. For patients, the chance of prescription abandonment increases due to cost.

5. Only less expensive options should be included
The decision process shouldn’t include all drugs in the therapy area. Care should be taken to list only alternatives that are less expensive than the target drug.

In our review of the data provided, we found that in some cases, PBMs provided alternatives that were more expensive than the selected drug. This obviously doesn’t help doctors make cost-driven prescribing decisions.

6. Only relevant alternatives should be included
Deciding which alternatives to include is certainly subjective. Including drugs most physicians have already considered or the patient has tried and failed is not helpful.

For example, suggesting sumatriptan as an alternative to the newer and more expensive migraine prevention drug Aimovig® is not relevant for patients who need to prevent (instead of treat) migraines. While the patient would save with the decades’ old treatment, it treats existing migraines and does not prevent them.

There are drugs that have multiple uses. These can be the most difficult to discern alternatives.  Careful attention needs to be paid to these drugs to provide relevant information to providers.

For example, alternatives for Humira would require a better understanding of the indication involved as not all of the alternatives are approved or used for every indication.

7. Use appropriate resources in creating alternatives
Developing drug alternatives using drug compendia classifications can lead to providing too few alternatives, too many alternatives, or possibly inappropriate alternatives. This could result in displaying alternatives options to doctors that are not therapeutically useful.

Without taking the time to enhance drug alternatives information using the right tools and experience, prescribers waste precious clinical time with patients sifting through alternatives and payers lose the opportunity to guide prescribers to cost-effective options.

8. Widely distribute alternatives 
Providers and patients are both looking for improved information to assist in selecting medications that patients can afford and are effective. While 87% of physicians receive formulary information through their EHRs, this information needs to be improved so it offers actionable prescribing guidance to doctors.

Emerging tools like real time pharmacy benefit information in EHRs and in health plan apps for patients represent new opportunities to communicate with prescription decision makers. Without including accurate, enhanced, and consistent alternatives data, these new sources of information will not work at their full potential to maximize cost-saving drug suggestions to prescribers and patients.

This means that payers must improve the information to help prescribers identify cost savings.

Preparing for More Complicated Benefits of the Future

We are in a period where formularies are getting more and more restrictive. Because of this, providers need additional direction to navigate ever more complicated and changing drug benefit restrictions and formularies.

Formulary information in EHRs provides an important channel to communicate with physicians during drug selection. The newer real-time pharmacy benefit tool provides another opportunity to inform physician decisions to the most cost-effective drug, although it occurs at the end of the ePrescribing workflow.

But this opportunity needs to be widely adopted. The frequency of alternatives is just as important as the relevance of the alternatives shown. In many cases prescribers will need to make some effort, like selecting a button, to find these alternatives in their EHR. If the data remains scant, as our small sample indicated, prescribers may abandon their pursuit of alternatives.

We have entered an age of consumerism in healthcare where patients are seeking cost information to be part of the drug decision process. Patients too need guidance to select the most cost-effective treatments to have more meaningful discussions with their physicians.

Benmedica’s Experience with SmartAlts

Benmedica has generated drug savings for over 15 million lives, helping capture part of the savings potential of over $167 per member per year. Drug alternatives play a critical role in creating savings by providing valuable and actionable information to prescribers during the decision-making process.

Consumers too need assistance and guidance in choosing cost-effective drugs. Benmedica’s SmartAlts system can customize alternatives for any drug benefit. Health plans too can supplement their PBM information with alternatives to create additional savings and can share the information via multiple channels – to prescribers, patients and pharmacies.

Our goal is to drive significant drug savings for payers, PBMs and members by unlocking the savings potential of alternatives - reach out to us to start the discussion.