Pharmacy benefit design options available to employers

Abstract

I explore all the pharmacy benefit options currently available to employers. First, I discuss the design of the benefit structure, which can involve up to five tiers of drug options and three tiers of pharmacy options. Next, I discuss how the employer can overlay a cost-sharing structure on top of that benefit structure, in order to provide each employee with the right balance of choice and incentives. The cost-sharing structure can entail up to seven main types of cost-sharing: copayments, coinsurance, incentive pricing, benefit caps, quantity caps, deductibles and defined contributions.

• drug costs
• drug plans
• pharmacy benefit design
• prescription drug copayments
• reference pricing