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Three-tier drug copayments in; closed formularies on way out?

MANAGED CARE March 2000. © MediMedia USA
News and Commentary

Three-tier drug copayments in; closed formularies on way out?

MANAGED CARE March 2000. ©2000 MediMedia USA

Three-tier prescription copayment designs are surging in popularity, according to an analysis by Scott-Levin. As of last fall, two thirds of health plans that offered a prescription benefit had instituted so-called triple copayments. By comparison, 12 months earlier, barely more than half of those plans had three-tier systems in place.

The copayments themselves are creeping up in price. The average copayment rose between 7 and 11 percent, depending on the tier, from spring of last year to fall.

Increasingly, health plans are placing brand-name drugs that are not on their formularies on the third tier, as opposed to placing only some nonpreferred brands and saying no to coverage of others. More than half of HMOs and pharmacy benefit managers do not charge the higher copayment for nonpreferred drugs if the product is deemed medically necessary.

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