Illinois Insurers Turn to Value-Based Pharmacy Design as New Cost Saving Measure

Wednesday, June 4, 2008 General News J E 4
NASHVILLE, Tenn., June 3 HealthLeaders-InterStudy, aleading provider of managed care market intelligence, reports that Illinoisbusinesses and insurers are rethinking drug utilization as a component ofhealthcare costs by turning to value-based pharmacy design to lower costs.According to the latest Illinois Health Plan Analysis, this idea has movedinto Illinois with the work of insurers like Health Alliance Medical Plans,which plans to expand its program to include new conditions.

Value-based pharmacy design (VBD) moves the costs of diagnosis andtreatment for certain conditions, including drugs and supplies, down to thetier with the lowest copay or no copay at all if they are deemed to beessential to maintain health. The result is a formulary system that placessome branded drugs to lower copay levels and generics to higher cost levels.

"In addition to Health Alliance, look for other insurers to apply value-based pharmacy design in the state, particularly with their diabetes andcardiovascular patients," states Roy Moore, market analyst for HealthLeaders-InterStudy and author of the report. "Results are defined as improvements inmedication adherence, following the thought that by reducing a member's copay,they are more likely to be adherent, which will lead to better outcomes andlower medical costs."

Under several pilot programs, Health Alliance has offered employers VBD aspart of a broader health and wellness program involving workplace wellness andpreventive medicine measures. On July 1, 2008, Health Alliance is rolling outVBD to its fully insured risk group with a 10 percent coinsurance rate fordiabetes drugs to its members, but no step therapy or prior authorization.The insurer is looking to expand the program to new conditions likescardiovascular disease, osteoporosis and asthma.

About Health Plan Analysis

Health Plan Analysis identifies key health plan trends, allowinghealthcare businesses to create comprehensive strategic plans and salesstrategies at state and local levels.

About HealthLeaders-InterStudy

HealthLeaders-InterStudy, a company of Decision Resources, Inc., is theauthoritative source for managed care data and analysis. For more information,please visit

All company, brand, or product names contained in this document may betrademarks or registered trademarks of their respective holders.For more information, contact: Elizabeth Marshall Decision Resources, Inc. 781-296-2563

SOURCE HealthLeaders-InterStudy


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