Background: Plan sponsors encourage the use of mail order pharmacies because they believe that mail order will lower the costs of your prescription drugs. Health plans and pharmacy benefit management (PBM) companies typically offer patients substantially lower copays to encourage them to use mail-order pharmacies. Several health plans and PBMs now require patients to use these pharmacies for maintenance prescriptions.
Objectives: To (a) compare the costs of prescription drugs delivered through mail order and retail pharmacies in medicare part d plans and (b) examine whether orders mail-order or retail pharmacies reduce all third-party costs for each of the top 300 products; the relationship between whether a product was available generically and whether retail or mail-order pharmacies offered lower prices; and generic substitution fees at retail and mail order pharmacies.
Methods: The sample for this study consisted of 2010 Medicare Part D prescription drug data for the 300 products with the highest sales at mail-order pharmacies. prescriptions included in the study were filled in the initial part d coverage limit phase by retail or mail-order pharmacies to patients who were insured under part d for 12 months in 2010, who did not receive part d subsidies d and who were alive for the full year in 2010. Average unit costs for both mail order and retail prescriptions were calculated for each of the top 300 products. products were defined by the medi-span generic product identifier. Summary statistics for overall costs of mail order and retail prescriptions were calculated as the weighted average unit costs of the top 300 products. the weighting factor for retail and mail-order prescriptions included both the number of mail-order prescriptions filled per prescription and the number of prescriptions filled. weighting mail-order and retail prescriptions by mail-order quantities dispensed and number of prescriptions ensured that the results reflected actual cost differences rather than differences in mix or prescription quantities dispensed. These calculations were made for total costs, costs covered by the Medicare Standard Benefit (MSB), costs paid by all third-party payers (including Medicare), and patient costs.
Results: The top 300 products accounted for 84.8% of mail order costs. Among all prescriptions in the sample, both mail order and retail prescriptions accounted for 7.8% of prescriptions filled and 14.1% of total spending. comparison of 90+ day supplies indicated that unit drug costs for retail pharmacies were lower for total costs ($0.94 for retail pharmacies vs. $0.96 for mail order pharmacies), msb costs ($0.59 for retail pharmacies vs. $0.63 for mail-order pharmacies) and all third-party costs ($0.64 for retail vs. $0.72 for mail-order pharmacies), but higher for patient costs ($0.31 for retail vs. $0.24 for mail order pharmacies). retail pharmacies had lower third-party payer costs for 244 items, while mail-order pharmacies had lower costs for 56 items. retail pharmacies were more likely to have lower costs for products that included generic alternatives, while mail-order pharmacies were more likely to have lower costs for products that included only brand-name drugs. generic substitution rates were 91.4% for retail pharmacies vs. 88.8% for mail order pharmacies. the results of secondary analyzes comparing all prescriptions that met the inclusion criteria, regardless of days’ supply, and comparing exactly 90-day supplies, yielded similar results.
Findings: Third-party payers, including Medicare, paid more for prescriptions filled at mail order pharmacies than for those filled at retail pharmacies in the medicare part d program. the higher payments appeared to be the result, for the most part, of higher patient cost sharing at retail pharmacies. furthermore, total costs, including third-party and patient payments, for 90-day supplies and 90-day or longer supplies were lower at retail pharmacies than at mail-order pharmacies. These results suggest that, all other things being equal, Medicare Part D plan sponsors do not realize savings when patients use mail-order pharmacies.