NATIONAL REPORTS—Though a two-tier formulary for generics and brand-name drugs was cutting edge 20 years ago, this decade has given rise to
the three-tier formulary, according to Perry Cohen, president of The Pharmacy Group. He predicts the third tier will likely
expand within the next 20 years.
NUMBER OF FORMULARY TIERS
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Respondents to MANAGED HEALTHCARE EXECUTIVE'S annual survey largely indicated (39.9%) that they have a three-tier formulary plan in place. Cohen says the third tier is
going to change to include specialty health benefits on top of the existing medical and pharmacy benefits.
"Specialty health benefits will deal mostly with drugs that are currently in tier four and five, because they are specialty
drugs that cost perhaps $10,000 a year," says Cohen. "So, over the next 20 years you're going to see traditional drugs covered
under a three-tier copay system, but that third tier is going to get more funky."
A separate benefit will have to be broken off, not because of cost, but because the patients on those drugs need a lot of
case management and the population numbers are small, Cohen says. "So the incidence is really small, the drugs are expensive, and they need a lot of case management to go with it, such
as tracking, use, genetic testing—and all those things are going to lead to a third category of health benefits, called specialty
health benefits."
In addition, Cohen says the market is moving from drug formulary management toward drug utilization management.
