Poor Patient Decisions Result in Drug Waste

In our August edition of Spotlight on Benefits, one of the key findings in the 2013 Drug Trend Report from Express Scripts Canada (ESC) was that up to $1 of every $3 spent on drug benefits is wasted.

ESC’s research found that 33% of annual drug spend is waste, defined as “spending more without improving health outcomes.” In fact, the data found that the primary driver of prescription drug inflation is not specialty drugs but uninformed patient decisions.

The two primary sources of waste are channel waste (25%) and drug-mix waste (75%).  Channel waste occurs when members choose high-cost distribution channels and inferior dispensing intervals that result in more dispensing fees than necessary. Drug-mix waste is created when members use higher-cost medications that generate no additional health benefits.  

Channel Waste
The use of high-cost distribution channels and suboptimal dispensing intervals for maintenance medications together led to more dollars spent on dispensing fees than necessary during 2013. The percentage of patients who use pharmacies that charge a high dispensing fee has also increased. In 2013, 44% of claims were filled with a dispensing fee equal to or higher than $11.99, up from 37% during 2012. Educating patients would lead to savings for members on dispensing fees and their benefit plan.

Maximizing the dispensing interval, where appropriate, leads to fewer pharmacy visits and reduces the amount of money spent on dispensing fees. ESC’s research showed that the average day supply of maintenance drugs in 2013 was 47 days versus the optimal day supply of 90 days; in fact, 60% of claims were dispensed with a day supply of 30 days or less.  Lengthening the day supply to 90 days would reduce the number of dispensing fees paid, therefore reducing the channel waste.

Drug-Mix Waste
Although generic substitution has helped combat drug-mix waste, therapeutic substitution is necessary to truly eliminate drug-mix waste.

Therapeutic substitution is the proactive switching of a prescribed higher-cost drug to a lower-cost therapeutic alternative that provides similar clinical benefit.  

In addition to channel and drug-mix waste, there are also unnecessary costs related to patient non-adherence to drug therapy. If a member does not adhere to their prescribed path of treatment, gaps in care are created. ESC’s research found that 40% of patients who suffer from common chronic conditions, such as diabetes and high blood pressure, were non-adherent to their medication. When plan members do not take medication as prescribed, it can lead to additional healthcare issues, resulting in illness and disability related costs.  

So, why do employees make poor decisions? Research shows that the majority of patients want exactly what the plan sponsors want: healthier outcomes and lower costs. However, with 33% of the drug spend being wasted annually; there is an obvious gap between what employees want and what they actually do. The first step to helping employees make better decisions is to close the gap between intention and behaviour.

Our October edition of Spotlight on Benefits will focus on what can be done to drive better patient decisions – decisions that will reduce waste, allowing for sustainable drug plan costs for plan sponsors, lower co-payments and optimum health outcomes for employees.