Staff Health Care Committee Recommendations An update for UAA’s APT and Classified Staff Councils November 2009

Caremark’s Initial Recommendations

Caremark Recommendation #1: Copay Changes RecommendationWhat This Means Increase brand copays Generic Keep at $5 Preferred Brand Currently $20, increase to $25 Non-preferred Brand Currently $35, increase to $50 *Mail orders pay 2 copays for a 3 month supply Copay would increase by $5 or 25% for Preferred Brand, and by $15 or 43% for Non- Preferred Brand In 2008, the two tier structure (generic, brand) became a three tier structure (generic, preferred brand, non-preferred brand). For the 2008 standard plan: Generics decreased from $7 to $5 Down $2 or 28% Preferred brands increased from $10 to $20 Up $10 or 100% Non-preferred brands increased from $10 to $35 Up $25 or 250% Note: These copays could be magnified by other proposed penalties (i.e. the mail order penalty).

Caremark Recommendation #2: Require Mail Order for Maintenance Meds RecommendationWhat This Means Incentivized Mail Program Maintenance medications (taken monthly) would be required to be filled through the mail order program after 4, 5, or 6 fills. If participants choose to continue to purchase in the retail environment, they would pay an additional retail copay. After 4, 5, or 6 fills on a maintenance medication (one taken monthly) at the local retail pharmacy, the prescription would have to be filled through mail order. The “additional copay” would mean that the patient would pay twice the copay for the drug: Add $5 for generic Add $20 or $25 for preferred brand [depending on whether the copay rates change] Add $35 or $50 for non-preferred brand [depending on whether the copay rates change] This would be a new penalty. Note: This penalty could be magnified by other proposed penalties (i.e. the “dispense as written” penalty).

Caremark Recommendation #3: Dispense As Written Penalty RecommendationWhat This Means Dispense As Written Participants would be charged an additional copay for choosing a brand drug when a generic equivalent is available. If a patient uses a brand drug when a generic is available, the patient would pay an additional copay for the drug: Add $5 for generic Add $20 or $25 for preferred brand [depending on whether the copay rates change] Add $35 or $50 for non-preferred brand [depending on whether the copay rates change] This would be a new penalty. Note: This penalty could be magnified by other proposed penalties (i.e. the mail order penalty).

Caremark Recommendation #4: Performance Step Therapy RecommendationWhat This Means Performance Step Therapy Participants would be required to use a generic before a non-preferred brand is covered. Participants would be required to try the generic version of a drug before a non- preferred brand is covered. The intent is to ensure there is a reason a member is choosing to use brand rather than generic. There is no additional charge associated with this recommendation, but it could require a change in the prescription filled from what was written by the doctor.

Caremark Recommendation #5: Preferred Brand Optimization RecommendationWhat This Means Preferred Brand Optimization Caremark would reduce the list of prescriptions currently on the preferred brand list, to include only those with the lowest net cost, and shortest patent life (time before a generic is available). Some prescriptions currently considered Preferred Brand would shift to the Non- Preferred Brand, which is at a higher copay level. Existing prescriptions could be moved to the higher copay level, which could be magnified if copay levels are increased or other penalties are instituted. This change would affect 1016 participants, or about a third of the people on prescriptions in a given month.

Caremark Recommendation #6: Specialty Guideline Management RecommendationWhat This Means Specialty Guideline Management A comprehensive, clinical review of specialty medication would be implemented, evaluating patient progress to determine whether appropriate results were achieved. Patient progress would be reviewed for participants currently on specialty medications. Specialty medications are a narrow class of drugs, and very few of us (about 89 people) are using them. They treat conditions such as HIV, Multiple Sclerosis, and Rheumatoid Arthritis.

Staff Health Care Committee’s Response to the Recommendations

SHCC Response: Principles Control health care costs while protecting the best interests of the thousands of staff we represent Identify reasonable compromises we can stand behind Respect the doctor/patient relationship Consider significant mail and weather factors in any changes that are mandatory

SHCC Response: Concerns Raising copays again so soon, particularly to the degree Caremark has recommended Implementing too many changes simultaneously. It makes more sense to select targeted changes and assess the results. Potential for Caremark’s recommendations to build on each other. An employee could pay $150 a month to remain on a non-preferred brand of insulin, purchased at the retail pharmacy to ensure the medicine is not damaged by sub-zero temperatures or stolen by neighbors. This would be an increase from $35 now, and $10 paid two years ago. Punishment for not using the mail order plan, when there are real concerns about effectiveness, temperatures, and mail problems in locations where flights have trouble getting in

SHCC Response: Recommendations Require patients to try generic before using preferred brand prescription. Exceptions must be made if there is a medical reason not to use the generic. Penalty for using brand when a generic is available is not necessary, since only patients who have a medical need for the brand should be using it Reduced list of preferred brands is not necessary or justified to affect more than a third of users Add incentive (not punishment) to increase mail order usage: 50% of retail for first mail order, rather than 66%

SHCC Response: Recommendations (cont.) Specialty medication evaluations should be conducted by the doctor, not the pharmacy vendor While the committee feels it is too soon for a copay increase, it is willing to support an increase of $5 for both the preferred and non-preferred brand medications, as long as it is NOT accompanied by any additional penalties for using a brand or not using the mail order program.

SHCC Response: Long Term Recommendations Consider modifying brand copays so the lower tier is for brands with no available generic and brands where the patient has documented they cannot take the generic, and the higher tier is for brands with a generic available and no medical reason why it is not being used Human Resources needs to improve communication about the factors that affect the health care plan costs, and how we can control them Increase equality for non-union staff on the Joint Health Care Committee (who currently have one seat, but make up 60-70% of employees)

Questions?