The Changing Face of Pharmacy Benefit Design

Dana P. Goldman, RAND Corporation and NBER
Jesse D. Malkin
Geoffrey Joyce

Abstract

Employers, health plans, and pharmacy benefit managers—seeking to reduce rapid growth in pharmacy spending—have embraced multi-tier pharmacy benefit packages that use differential copayments to steer beneficiaries toward low-cost drugs. The consensus of fifteen pharmacy benefit design experts whom we interviewed is that such plans will become more prevalent and that the techniques these plans use to promote low-cost drugs will intensify. The effect on health outcomes depends on whether the high-cost drugs whose use is being discouraged have close, low-cost substitutes.