Microsoft word - 03-122 pharmacy renewal.doc

Department of Purchasing Kendra Goodman, CPPB, Purchasing Agent 813/ 794-2221
August 17, 2004
M E M O R A N D U M
TO:

SUBJECT: RFP 03-122, Pharmacy Benefits Management Services
On July 22, 2003, official action (attached) was taken to award the above-referenced contract to Walgreen’s Health Initiatives (WHI). On July 20, 2004, the Board granted permission for the Insurance Committee to continue to negotiate rates and programs for calendar year 2005 in the best interest of the District. The agreement is a five-year contract, renewable annually based upon the mutual consent of both parties. The second year of the agreement, which is self-funded by the District, will expire on December 31, 2004. The District’s Insurance Committee asked WHI to estimate the total dollars the Board will need to fund the program in 2005. WHI projected the total costs for the upcoming plan year would be 15% higher than in 2004, or a total of $6,161,629. In an effort to lower costs, the Insurance Committee has agreed to implement four (4) design changes to potentially save the program $255,000. This 4% decrease would lower the projected plan costs to $5,906,558.00. The plan design changes being recommended are as follows: 1. Have the retail co-payment schedule change from $7 generic/$25 preferred brand/$40 non-preferred brand to $10/$25/$40. Increasing the generic co-payment from $7 to $10 will potentially avoid $54,738.27 in costs to the Board. RFP 03-122, Pharmacy Benefits Management Services Page 2 2. Adopt the “Advantage 90” Program. This program will permit employees to purchase a 90-day supply of prescriptions from a retail pharmacy for 2 ½ times the retail amount. The program’s co-payment schedule will be $25 generic/$62.50 brand/$100 non-preferred brand. This will potentially avoid $7,465.46 in costs to the Board. 3. Exclude Prilosec and omeprazole (generic name) from the pharmacy benefit management program. Prilosec is now available over-the-counter (OTC) and the additional cost to the Board does not make it prudent to continue coverage under the program. This will potentially avoid $8,418.61 in costs to the Board. 4. Implement “step-care” therapy programs in three (3) different clinical areas, in an effort to avoid misuse of prescription medications and to control costs. Step-care therapy entails the utilization of an effective, clinically-proven, “first-line” agent before a more expensive alternative may be covered or dispensed under the prescription benefit plan. Claims for the more expensive, “second-line” agents will be rejected unless evidence exists in the patient’s prescription profile or medical history that the first-line agent has been tried without success, or the first-line agent is not recommended. Covered members of the plan already taking a second-line agent prior to the program being implemented will not have their utilization reviewed or their prescriptions denied. The three (3) clinical areas in which we are recommending step-care therapy are a) COX-2 inhibitors, b) Leukotrienes (allergic rhinitis) and c) Proton-Pump inhibitors (treatment of dyspepsia, or acid stomach and heartburn). Please refer to the attached memo from Todd Gutman, Director of Employee Benefits and Risk Management, for detailed information. These step-care therapy programs will potentially avoid $125,642.82 in costs to the Board. At this time, it is my recommendation to enter into the second year of the agreement with Walgreen’s Health Initiatives under the amended terms and conditions outlined above. The term will be January 1, 2005 – December 31, 2005. Should you have any questions or wish to discuss this matter further, please feel free to contact Todd Gutman or me at your earliest convenience. KDG/az Attachments

Source: http://purchasing.pasco.k12.fl.us/bd_packet%2004_05/08_24_04/03-122%20pharmacy.pdf