Mail order pharmacy: 5 things MCOs should consider

New research raises questions on supposed cost savings drive by mail order pharmacies.

Recent research offers evidence of medication waste resulting from prescriptions filled by mail order pharmacies and raises questions on supposed cost savings.

The study, funded by a grant from the Community Pharmacy Foundation (CPF), examined more than 6,500 prescriptions consumers returned for disposal at pharmacies participating in the National Community Pharmacy Association’s (NCPA) Dispose My Meds program between June 2012 and June 2013. It found that those originating through mail order were more likely to have in excess of 80% of the medication remaining when compared to retail pharmacies (58% of mail order disposals compared to 37% for retail). Furthermore, mail order disposals were also more likely costly brand medications when compared to retail.


However, Steve Miller, MD, chief medical officer, Express Scripts, points out the CPF grant states it is ‘too early to draw conclusions’ from this research.

More than 1,600 community pharmacies offer patients a disposal option for most prescription drugs that are expired or unneeded, according to Kevin Schweers, spokesman for the National Community Pharmacists Association. “The study examined where the medication turned in for disposal was originally obtained,” he says.

Related:Pharmacists as providers: The expanding, changing role

The study raised two primary findings. First, patients of mail order pharmacies turned in 100% of their medication for disposal much more frequently than patients of community pharmacies did.

“In other words, these patients disposed the entire shipment of medication that they received through the mail without taking any of it,” Schweers says. “It suggests that this medication was not needed and probably should never have been shipped in the first place. That’s wasteful healthcare spending at a time when everyone struggles with rising costs.”

Second, the medication received through the mail and turned in for disposal was more likely to be brand name medication.

“Brand name prescription drugs are typically far more expensive than generic drugs,” Schweers says. “So to the extent that mail order pharmacies generate waste, as measured by unused medication, it is expensive waste.”


NEXT: Mail order pharmacies respond


Managed care executives should take note of these findings and consider the full picture when they make decisions about the design and structure of their prescription drug benefit, according to Schweers.

“Most mail order pharmacies are owned by the same entities that administer the drug benefit [pharmacy benefit managers],” he says. “It’s a clear conflict of interest for PBM corporations to both oversee a drug plan and profit from prescriptions filled at their proprietary mail order pharmacies.

“Managed care executives may be bombarded by pitches from PBM corporations about attractive ‘cost savings’ that theoretically could be achieved by requiring or heavily incentivizing the use of mail order pharmacies by patients,” Schweers adds. “These pitches likely ignore the shortcomings of mail order, including generating more waste and complaints by patients criticizing poor service by mail order pharmacies.”

Related:Are laws, regulations pricing consumers out of generic drugs?

Express Scripts, the nation’s largest PBM serving more than 85 million members, says the cost savings and clinical benefits of its home delivery pharmacy are not theoretical, pointing to evidence that clearly demonstrates the value of mail-order pharmacy for patients and plan sponsors. The company’s research shows the United States could save an additional $96.3 billion if every patient used home delivery for their maintenance medications.


“Express Scripts clients with closely managed pharmacy benefits saw no year-over-year increase in drug spending in 2014 and spent 30% less per member per year on traditional medications compared to plans with fewer utilization management programs,” says Miller. “Clients who paired use of our home delivery pharmacy with these utilization management programs saved an additional 12% to 19% on drug spending.”

While it differs from plan to plan, mail-order pharmacy is more cost-effective for the patient, too.  Copayments are, on average, 29% lower through home delivery than at retail pharmacies, says Miller.


NEXT: Five things to consider


Here are five things managed healthcare executives should consider when it comes to mail order pharmacy

1. Mail order may not be for everyone.

“Managed care executives should support giving patients equal access to the pharmacy option that works best for them, whether an independent pharmacy, a big box store or mail order,” Schweers says. “Research has found that the patient-pharmacist connection is a critical influence on the likelihood that patients stick with the medication their doctor prescribed, which is vital to health outcomes and avoiding expensive care such as hospitalizations.”

Related: The new patient-centered pharmacy

Miller notes that the unique pharmacy practice at Express Scripts, which leverages automated dispensing technology with an 99.99998% accuracy rate, allows its pharmacists to specialize in common chronic conditions that offer patients more personalized care and support-24 hours a day, seven days a week from the privacy of the patient’s home.  This is especially beneficial for patients with limited mobility.

“Express Scripts specialist pharmacists and nurses in one of our 19 Therapeutic Resource Centers use their disease-specific experience to ensure safety, improve medication adherence and close gaps in care,” says Miller.

2. Be aware of the full picture when it comes to mail order.

“When PBM corporations extoll the virtues of mail order pharmacies, that they probably own, don’t accept their arguments at face value. For example, patient complaints about poor service from mail order pharmacies are common,” Schweers says.

In 2013, he says, federal Medicare officials were so inundated with such complaints from seniors that they published an online summary of the most frequent problems.

“As a result Medicare has taken steps to reduce ‘auto-fills’ from mail order by requiring more definitive confirmation from patients that they in fact want the shipped refills of medication,” Schweers says.

However, research published in the Journal of Managed Care and Specialty Pharmacy shows that Medicare beneficiaries taking medications for diabetes, high blood cholesterol, or hypertension who fill their medications via home delivery from the Express Scripts Pharmacy are 11% to 19% more likely to be adherent with their medication compared to beneficiaries who fill these medication at a retail pharmacy. With 2016 CMS Star Ratings cut points for adherence to therapies in these categories between 79% and 82%, the increased likelihood of adherence using mail-order is crucial for MA-PD plans seeking to maintain a high Star Rating.


NEXT: Two more things healthcare executives should consider


3. Medication waste generated by mail order pharmacies may be more common than thought.

“Community pharmacists routinely encounter patients who don’t know what to do with large quantities of medication that can no longer be used and may have been auto-shipped by mail order pharmacies,” Schweers says.

4. Managed care executives should regularly monitor mail order for the safety, accuracy and timeliness of medication orders.

Schweers points to a recent GAO report that noted that the Department of Defense (DOD) could have done a better job in this regard. “Everyone should do their homework,” he says.

This same report, however, determined that the DOD achieved approximately $123 million in savings during its TRICARE for Life home delivery pilot, according to Miller. 

Related:Consumerism increases retail opportunities and access to coverage and care

Furthermore, he says, an audit of the TRICARE mail-order pharmacy program by the DOD Inspector General in 2013 found that mail order saved the DOD 16.7%-nearly $67 million in the third quarter of fiscal year 2012-when compared to retail pharmacies. In addition, the audit found that prescriptions filled through the mail were 99.997% free of clinical errors, such as shipping the incorrect pharmaceuticals, while retail pharmacies on average were 98.5% error-free. The audit also reported the mail-order pharmacy program achieved beneficiary satisfaction ratings as high as 98.3%.

5. Community and retail pharmacies have unique attributes that may be helpful in serving different patient populations.

“Community and retail pharmacies play an important role in our healthcare system by addressing patients’ acute pharmacy needs and offering support for patients who prefer in-person pharmacist care," says Miller. "However, home delivery pharmacies play an equally important role for patients who use medications on a long-term basis, offering greater convenience, customized care, and significant cost-savings for patients and payers."


NEXT: Next steps


“Community pharmacists understand the challenges faced by managed care executives when it comes to the cost of healthcare,” Schweers says. “Pharmacists want to work constructively with managed care executives toward solutions.”

For example, according to Schweers, it’s estimated that as much as $290 billion in annual healthcare spending stems from a lack of medication adherence by patients.

“Community pharmacists can work with patients to address and eliminate barriers to proper medication utilization,” he says.

A new NCPA study found that a group of community pharmacies working to promote adherence can achieve results. According to the study, patients were 2.5 times more likely to stick with their medication, because of intervention of community pharmacists.

"Those patients are less likely to wind up in the hospital for vastly more expensive medical treatments," Schweers says.. 

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