Home delivery of pharmacy benefits saves money

By Tom Philpott: CNJ columnist

Military retirees and families will save themselves some cash — and save TRICARE a whole lot of money — by using their “home delivery” pharmacy benefit instead of filling prescriptions at TRICARE retail outlets. Pharmacy officials are doing whatever they can to drive that message home to 7.5 million users of the military’s triple option drug plan.

Military pharmacy costs jumped 7.2 percent in 2009 to reach $7.5 billion. That’s a fivefold increase from 1999 when drug costs were $1.3 billion. A lot of the growth is from expansion of drug benefits to older retirees in 2001. But pharmacy officials more recently blame the rising popularity of using retail outlets instead of mail order or base pharmacies.

A prescription for a brand name drug filled at Rite Aid, CVS or another commercial outlet costs TRICARE about 35 percent more than do drugs dispensed on base or through the military mail order program.

To slow rising pharmacy costs, officials have a host of new initiatives to make mail order more popular and accessible. The most recent is a name change to “home delivery” which sounds more like a service, not a headache. “We’ve heard from a lot of elderly beneficiaries that it’s tough to get out sometimes, even to go downtown to the drug store to pick up their medication. So we encouraging them to use home delivery,” explained Rear Adm. Thomas J. McGinnis, chief of TRICARE pharmaceutical operations.

But more significant changes have occurred, or are planned, to entice beneficiaries into using home delivery, particularly those needing maintenance drugs for conditions they’ll have the rest of their lives. One long-time enticement for home delivery is lower co-payments. Prescriptions filled in retail outlets cost beneficiaries $3 for generic drugs, $9 for brand name drugs on TRICARE’s formulary and $22 for non-formulary brand medications. In retail outlets, the rates are for a 30-day supply.

With mail order, the same co-pays apply but for a three-month supply of pills, or a savings of 66 percent, said McGinnis. For a brand name drug on the formulary, he said, the savings is $72 per prescription per year.

“We’ve got a lot of beneficiaries on five to seven maintenance medications,” McGinnis said. Many of them would save hundreds of dollars a year using home delivery. More than 78,000 TRICARE beneficiaries rely on 10 or more prescription drugs and would see higher savings.

But lower co-pays haven’t done much to popularize the mail order option. Last year, outpatient prescriptions filled in retail outlets cost TRICARE $4.7 billion, a 14 percent jump from 2008. Only $1.4 billion was spent on base for outpatient drugs, a three percent increase after four straight years of declines that had averaged about five percent per year.

The mail order program dispensed only $1 billion worth of drugs last year, an increase of 9.6 percent. Some of that is credited to the Member Choice Center, which began operating in 2007 and recently expanded its hours. Beneficiaries who have had prescriptions filled at retail can call the MCC toll free at 1-877-363-1433 and ask to switch to home delivery. They also can make the switch online at http://www.express-scripts.com/TRICARE