Navitus Health Solutions, Appleton, a pharmacy benefit manager, has introduced a new prescription drug purchasing pool in Wisconsin that can cut a patient’s prescription costs up to 10%.
Jay Fulkerson, president of Navitus, suggested that small businesses should form alliances so they can lower the financial risk of prescription coverage for employees and lower costs for prescriptions in the future.
Because Navitus is not an insurance company, the financial risk of participating in the Navitus program is generally too high for small businesses. Fulkerson said the best way for small businesses to be able to receive savings on prescriptions is to form an allegiance and pool their money.
"Our problem for small businesses is that there is not a self-insured vehicle. We are currently talking to insurance carriers about Navitus," said Fulkerson. "If we can pool small business owners to absorb the risk of insurance themselves, then Navitus can be a solution. We don’t have any financial risk if insurance claims are higher than we thought, but the smaller you are, the more the risk."
The Navitus program is a drug formulary based on research and created from the opinions of the Navitus Pharmacy and Therapeutics Committee, consisting of nine physicians, four pharmacists and one community member.
"We put doctors and pharmacists in teams to choose the best brand names and the generic equivalent, and then we go to the manufacturer and negotiate the best price," said Fulkerson. "Manufacturers fight to get on the list, and then the deal we get from the drug company we give to our customers."
With co-pays as low as $5 for a Level 1 medication, $15 for Level 2, and $35 for Level 3, plus an annual membership fee, each client of Navitus will save 10% on costs in the first year, according to Fulkerson.
"I say 10 percent in the first year because we think we can increase the savings," said Fulkerson. "The more compliance we have to the program, the more money we can save. It is all designed around the employers and the employees."
According to Fulkerson, the co-payment is mainly 25% to 30% of the average prescription cost. Essentially, the less Navitus has to pay for the prescriptions, the less the company has to cover and the patient has to pay at the counter.
The pharmacy benefit program is available at the majority of pharmacies in Wisconsin with a Navitus drug card. According to Fulkerson, patients have been happy with Navitus’ approach and feel more comfortable choosing medication selected by physicians rather than an insurance company.
Navitus was formed in 2003 when Touchpoint Health Plan, Appleton, and Dean Health Plan, Madison, combined to administer BadgerRx, the state’s name for the Navitus pooling program.
Since Jan. 1, Navitus has managed the state’s 260,000 employees, according to Fulkerson. Combined with clients carried over from when the companies were separate, Navitus manages 600,000 people in the state, and Fulkerson expects to reach 1 million people by the end of the year.
According to Fulkerson, prescription drug costs are increasing 15% to 20% every year. Fulkerson said he wants small businesses to get involved and that the state is trying to accommodate them.
"The state is working on cooperatives and legislation designed to pool small businesses," said Fulkerson. "There is work being done. Nothing concrete, but a lot of discussion."
Until then, Fulkerson’s advice is to create independent pools to join in on the savings.
"We are a transparent company," said Fulkerson. "We want physicians to feel more comfortable with the drug list, and we want to manage the pharmaceutical expenses for customers in an environment where the customer understands exactly how the program works and exactly where their money is going."
Feb. 20, 2004 Small Business Times, Milwaukee
