Prescription Drug Program

Summary

The prescription drug program offered to Northwestern University faculty and staff is established to be competitive with the prescription drug programs offered by other employers which follow generally accepted and safe treatment protocols, and which is priced at reasonable levels.

The program covers most of the commonly prescribed medications approved by the Food and Drug Administration (FDA). As with other health plan benefits, the prescription drug program has coverage limitations and exclusions which include the following:

• over the counter medications,
• vitamins other than prenatal medications requiring a prescription,
• topical acne medications,
• weight loss medications,
• blood and blood products,
• cosmetic products, and
• experimental or investigational medications.

Walgreens Health Initiatives (WHI)

Walgreens Health Initiatives (WHI) serves as the administrator of the prescription drug program for the Premier PPO, Select PPO and HMO Illinois members. Blue Cross administers the prescription drug program for Value PPO members.

Established in 1991, WHI, part of the 100-year-old Walgreen Co., promotes employee health with comprehensive, individually designed pharmacy benefit management (PBM) programs. Serving more than 400 clients representing 2.6 million covered lives, WHI offers a nationwide retail pharmacy network, mail service pharmacy, specialty pharmacy, and, in select geographic areas, home care services and products.

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Membership Cards

Faculty and Staff receive prescription drug program membership cards directly from Walgreens Health Initiatives (WHI).

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The term "formulary" refers to an extensive list of available prescription drugs offered by a plan to serve the member pharmaceutical needs of patients. As each plan's formulary may include or exclude certain medications, individuals should contact the applicable health plan for additional information.

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Co-payments

After a plan member obtains a prescription from his or her doctor, he or she has the choice of obtaining the medication from a retail pharmacy or by mail order.

The University's health care plans cover the majority (approximately 80%) of prescription costs with plan members paying a small portion or fraction (approximately 20%) of the overall cost. Plan members pay his or her portion of the prescription cost on the basis of a co-payment. Co-payments for prescription drugs are based on a three tier structure. The amount that a health plan member pays for a prescription depends largely upon the medical plan in which he or she is enrolled, the prescribed drug and whether the drug is obtained from a retail or mail order pharmacy. The co-payment amount a member is charged for a specific drug also depends on the co-payment tier where a drug is placed. Generic drugs are typically set at the lowest co-payment tier, with some brand name drugs set at the second or middle tier and other brand name drugs set at the highest or third tier.

Additionally, the co-payment for a branded drug will be paid whenever the branded drug is purchased, even if a generic alternative is not available

Prescription Drug Co-Payment Schedule

Generic drug (First Co-payment Tier).

A generic drug is identical, or bioequivalent to a brand name drug in dosage form, safety, strength, route of administration, quality, performance characteristics and intended use. Although generic drugs are chemically identical to their branded counterparts, they are typically sold at substantial discounts compared to the price of a brand name drug. According to the Congressional Budget Office, generic drugs save consumers an estimated $8 to $10 billion a year at retail pharmacies. Even more billions are saved when hospitals use generic drugs. To gain FDA approval, a generic drug must:

• contain the same active ingredients as the innovator drug (inactive ingredients may vary)
• be identical in strength, dosage form, and route of administration
• have the same use indications
• be bioequivalent
• meet the same batch requirements for identity, strength, purity, and quality
• be manufactured under the same strict standards of FDA's good manufacturing practice regulations required for innovator products

United States trademark laws do not allow a generic drug to look exactly like the brand-name drug. However, a generic drug must duplicate the active ingredient. Colors, flavors, and certain other inactive ingredients may be different.

Generic drugs are less expensive because generic manufacturers don't have the investment costs of the developer of a new drug. New drugs are developed under patent protection. The patent protects the investment-including research, development, marketing, and promotion-by giving the company the sole right to sell the drug while it is in effect. As patents near expiration, manufacturers can apply to the FDA to sell generic versions. Because those manufacturers don't have the same development costs, they can sell their product at substantial discounts. Also, once generic drugs are approved, there is greater competition, which keeps the price down. Today, almost half of all prescriptions are filled with generic drugs.

Brand name drugs (Second and Third Co-payment Tiers).

Brand-name drugs are generally given patent protection for 20 years from the date of submission of the patent. This provides protection for the innovator who laid out the initial costs (including research, development, and marketing expenses) to develop the new drug.

Second Tier The second co-pay tier includes the majority of brand name drugs available today, over 850 drugs. Brand-name drugs are patent-protected and product-trademarked.

To maximize your prescription drug benefit, the Prescription Drug Plan uses a Preferred Drug List (PDL) of cost-effective drugs. Physicians are encouraged to prescribe from this list when it is appropriate for your condition.

The Preferred Drug List is a guide to medications within select therapeutic categories for prescription drug plan participants. It is not a formulary and purposely omits many categories. Within the categories represented, this drug list will help the physician and plan participants identify products for therapeutic purposes.

Third Tier The third tier exits for high expense drugs, often the newer or highly advertised medications. Many of the drugs have a brand or generic equivalent.

An unexpectantly high number of prescriptions and their associated co-payment costs during a year's period can impose a large financial burden on a plan member. To protect a member against possible catastrophic financial loss and his or her financial security due to his or her prescription needs, the University has established an overall annual limit on the amount of money a plan member will pay for medications. This feature is called stop-loss protection and is offered to Premier PPO, Select PPO and HMO Illinois members. This feature parallels stop-loss protection which limits the amount of money a member pays for inpatient and outpatient hospital services, diagnostic tests and physician services.

The University has set the stop loss limit at $1,500 per family member. In other words, once co-payments exceed $1,500, the plan will cover 100% of prescription costs for the remainder of that calendar year.

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Dispensing Limits

For certain drugs, the plans normally provide coverage up to specified dispensing limits. A plan member may obtain medications above specified dispensing limits but will be responsible for paying for the additional quantity.

These dispensing limits are established by physicians, including board certified and nationally respected physicians, clinical pharmacists and others. Pharmaceutical manufacturer and FDA guidelines are also used in determining dispensing limits.

Individuals participating in the Premier PPO, Select PPO and HMO Illinois plans may obtain plan coverage for certain medications when the plan does not cover it beyond a specified quantity.

These health plans may cover higher quantities of a drug with a dispensing limit when the member's physician speaks with the Walgreens Health Initiatives (877) 665-6609, which is staffed by pharmacy technicians and pharmacists. The patient's medical condition is discussed with respect to clinical indicators for the continued use of a specific drug. Physicians are acquainted with these procedures, and pharmacists normally check with physicians when the pharmacist has a reason to want to assure prescription accuracy, even if obtaining this assurance may delay immediate filling of a prescription.

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Prior Authorization

Before a health plan will cover a specific medication or quantities of a medication above established dispensing quantities, a member's physician may be required to obtain prior approval from the health care plan. Premier PPO, Select PPO and HMO Illinois members may have their physician contact the Walgreens Health Initiatives (877) 665-6609. This unit is staffed by pharmacy techicians and pharmacists. The patient's medical condition if discussed with respect to clinical or medical indicators for the continued use of a specific drug

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