Articles on Pharmacy Benefit Management

Plans, PBMs Push Pill Splitting, but New Generics Lessen Impact

Reprinted from the June 29, 2007, issue of DRUG BENEFIT NEWS, biweekly news, data and business strategies for health plans, PBMs and pharmaceutical companies.

Health plans, pharmacy benefit managers (PBMs) and other pharmaceutical payers continue to encourage recent pill-splitting programs, which they say are generating significant savings to both members and themselves. But the firms also acknowledge that the introduction of many new generic drugs has diminished the bottom-line impact of the practice.

A voluntary pill-splitting program launched by Indiana-based insurer M-Plan in early 2006 saved members roughly $780,000 last year, compared with what they would have spent without the program, the company said. Participants in M-Plan's pill-splitting program receive either a 60- or 30-day supply of medication with a 50% reduction in copayments, implemented automatically at the point of service. M-Plan also provides a free pill splitter, valued at $7, to every member who elects to participate.

The health plan, which has roughly 150,000 covered lives, projects similar savings in 2007. The program this year added 15 more drugs to the program, up from seven drugs last year, says Chuck Mihalik, Pharm.D., director of pharmacy services for M-Plan's parent organization, The Health Care Group, LLC.

Most of the drugs in the program are antidepressants, antihypertensives and antihyperlipidemics. But Mihalik also acknowledges the cost-saving tool may be losing some of its punch. "The arrival of more generics has made pill splitting less attractive, mostly because the savings is not nearly as great," he says.

UnitedHealth Group's PBM Prescription Solutions in May 2006 expanded its pill-splitting program to include 16 drugs in five therapeutic categories: ACE inhibitors, angiotensin receptor blockers, antidepressants, lipid-lowering drugs and antivirals. At that time, Tim Heady, CEO of Pharmaceutical Solutions, said the Half Tablet Program offered a potential savings of up to 2% on total drug spend, and that members could save up to $300 annually through the program

Based on current participation rates, members are saving roughly $20 million annually in out-of-pocket costs, Heady tells DBN. United, and the groups served by the insurer, save another $40 million annually, he adds.

The participation rate overall is 12%, but runs as high as 30% depending on location and benefit design. "Our expectation, based on our experience to date, is that we should be able to get national participation somewhere around that 30%," Heady says, noting this is the goal over the next 12 to 18 months.

Participation was hindered by last year's introduction of generic Zocor in the cholesterol-lowering category, Heady explains. "A lot of people who would have participated now are getting generic Zocor for $10 average copays. At that copay level, we're seeing fewer people looking to split because they're already at a good out-of-pocket cost. With generics, the opportunity for savings is less."

"We continue to see this as a very important consumer-driven program," he says.

Potential Savings Are Still Largely Untapped

The University of Michigan (U-M) launched a pill-splitting program around cholesterol-lowering statin drugs in early 2006. U-M said this month that it saved $195,000 as a result of implementing the program last year, and the more-than 500 U-M employees and retirees in the program saved more than $25,000 in copayment costs. U-M's pill splitting program offers members a 50% copay reduction, with a free pill cutter provided once a year.

The potential savings are much greater, however. Keith Bruhnsen, manager of U-M's prescription drug plan, says that if 25% of eligible statin users actually split their pills, the savings would be $740,000. If 35% of the participants split, the savings would be $1 million, and if 45% participated, the savings would be $1.3 million. At the time of the pill-splitting launch, more than 6,000 members were eligible to participate, he notes. This means that roughly 8% of eligible members actually participated.

"Clearly there is significant room for growth through continued promotion with members and physicians," Bruhnsen says.

Still, Bruhnsen also acknowledges that recent generics have lowered the incentive for pill splitting in general. This is true "especially with plans that have lower member copays or that give incentives for reduced cost at mail order," he adds. "Some plans are moving to lower generic copays to incent higher generic utilization."

A new U-M study that looked at financial incentives and outcomes of patients participating in a statin pill-splitting program finds that most individuals are not opposed to the practice, but they do want significant copayment reductions.

According to the six-month study, published in the June issue of American Journal of Managed Care, 73% of 103 participants in the U-M program said that to continue splitting pills would require a 50% reduction in copays. Another 24% said that they would need their copays waived, and 3% said that splitting pills would not be worth the effort regardless of the savings, the study finds. Voluntary pill-splitting programs seem to be optimal when some of the financial benefits are shared with patients, the study adds.

PBMs are getting into the act, but also are encouraging generics over splitting. Medco Health Solutions, Inc. administers pill-splitting programs at the request of clients. "Medco recognizes the significant savings opportunity that a pill-splitting program can provide, and we are in a position to help clients tap into these savings, while at the same time ensuring that the highest level of clinical care is maintained," says spokeswoman Jennifer Luddy.

Clients decide how they structure their benefit plans around pill-splitting programs. For example, a program could be designed to provide a patient with a lower copayment to participate in a pill-splitting program. "If a generic equivalent is available, or a generic alternative is clinically appropriate, that would be preferable to pill splitting," Luddy says.

Education Key to Pill-Splitting Participation

Plans and employers that offer pill splitting say that education is still the biggest barrier to greater participation.

Bruhnsen says member communication remains a key hurdle. "We are planning for another round of communications to our membership this fall," he adds. Other barriers include community pharmacy buy-in or support, as there are financial disincentives to the pharmacy, and marketing by pharma to pharmacist and the general public that pill splitting is not safe or is ill advised, Bruhnsen says.

M-Plan's Mihalik agrees education is vital. "Written information does not seem to be sufficient for many members," he says. "They need to talk one-on-one with their pharmacist as well as the prescriber."

"We have found that about 70% of those members who are not presently pill splitting will choose to split pills after talking with our pharmacist or technician," Mihalik says. The plan conducts an outbound-call process called RxCall, where it identifies eligible members and calls them, after mail notification, to discuss the pill-splitting option.

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