Mail-order pharmacy service does not guarantee savings

Employers must balance benefit design, convenience and cost-saving issues

[ClickPress, Thu Dec 01 2005] ST. PAUL, Minn. – Dec. 1, 2005 – For years, mail service for prescription drugs has been pitched as a way for employers to save money by providing deeper discounts, central control, and the ability to switch to less expensive and equally effective drugs – and as a convenience to members. The reality is that using mail service – as opposed to retail fulfillment – may or may not be a good deal for employers.

In the most recent installment of the Pharmacy Benefit Podcast, available at www.burchfieldgroup.com, Brian Bullock and Rob Shelley of The Burchfield Group discuss mail-order versus retail, and what employers need to know to provide the best pharmacy benefit plans for their companies and their employees.

“We’ve got clients – large-employer organizations – that have been giving up as much as two to three million dollars per year by having inappropriately set mail-order co-pay plan designs,” said Shelley, vice president of The Burchfield Group. “In other cases, we have Fortune 50 employers who are making out great, and are actually saving money on mail order, so it really comes down to how that benefit is structured in relation to the terms of the contract.”

Bullock and Shelley discuss the importance of finding balance between correctly structured benefit design, convenience and cost-saving issues. Employers need to provide incentives for employees to use mail service while at the same time ensuring that mail service still results in savings to the employer. Employers also must understand that not all drugs are cheaper via mail service, and they need to determine their specific break-even point to ensure the best use of mail-order service.

With regard to developing trends in the mail-order realm, the news is actually happening in the retail environment, according to Bullock, president of The Burchfield Group. “What we’re seeing at the corner drug store is an interest in providing 90-day supplies of medications to consumers. What consumers used to have to go to the mail service to get – an extended-day supply of product – they can now get at the corner drug store as an option. In addition, the corner drug store is providing slightly deeper discounts in exchange for the efficiencies of dispensing larger quantities.”

Bullock and Shelley invite listeners to submit questions and comments, which they will answer in subsequent podcasts. Send an e-mail to info@burchfieldgroup.com or call 651-389-5640.

About The Burchfield Group
The Burchfield Group is a pharmacy benefit management consultancy based in St. Paul, Minn. The Burchfield Group brings innovative perspectives to managing pharmacy benefits, helping plan sponsors evaluate and select pharmacy benefit administration vendors, designing pharmacy benefit plans, monitoring plan and PBM performance, and auditing results. Their staff of experts has a vast knowledge of the PBM industry, including insight into drug manufacturers’ influences, mail service profits and retail network margins. (www.burchfieldgroup.com)

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