Express Scripts 2012 Annual Report Download - page 7

Express Scripts 2012 Annual Report 5
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The client’s choice of benefit design is entered into our electronic claims processing system, which applies the
plan design parameters as claims are submitted and provides visibility to the financial performance of the plan.
Drug Utilization Review. Our electronic claims processing system enables us to implement sophisticated
intervention programs to assist in managing prescription drug utilization. The system can alert the pharmacist to generic
substitution and therapeutic intervention opportunities, as well as formulary compliance issues, and can also administer
prior authorization and step therapy protocol programs at the time a claim is submitted for processing. Our claims
processing system also creates a database of drug utilization information that can be accessed at the time the prescription is
dispensed, on a retrospective basis to analyze utilization trends and prescribing patterns for more intensive management of
the drug benefit, and on a prospective basis to help support pharmacists in drug therapy management decisions.
Drug Formulary Management, Compliance and Therapy Management Programs. Formularies are lists of drugs to
which benefit design is applied under the applicable plan. We have many years of formulary development expertise and
maintain an extensive clinical pharmacy department.
Our foremost consideration in the formulary development process is the clinical appropriateness of the particular
drugs. In developing formularies, we first perform a rigorous assessment of the available evidence regarding each drug’s
safety and clinical effectiveness. No new drug is added to the formulary until it meets standards of quality established by
our National Pharmacy & Therapeutics (“P&T”) Committee, a panel composed of 16 independent physicians and
pharmacists in active clinical practice, representing a variety of specialties and practice settings, typically with major
academic affiliations. We fully comply with the P&T Committee’s clinical recommendations. In making its clinical
recommendation, the P&T Committee has no information regarding the discount or rebate arrangement we might negotiate
with the manufacturer. This is designed to ensure the clinical recommendation is not affected by our financial
arrangements. After the clinical recommendation is made, the drugs are evaluated on an economic basis to determine
optimal cost effectiveness.
We administer a number of different formularies for our clients. A majority of our clients select formularies that
are designed to be used with various financial or other incentives, such as three-tier co-payments, which drive the selection
of formulary drugs over their non-formulary alternatives. Some clients select closed formularies, in which benefits are
available only for drugs listed on the formulary. Use of formulary drugs can be encouraged in the following ways:
Q through plan design features, such as tiered co-payments, which require the member to pay a higher amount for a
non-formulary drug
Q by applying the principles of Consumerology®, our proprietary approach that combines principles of behavioral
economics and consumer psychology with marketing strategies, to effect positive behavior change
Q by using our clinical specialization to educate members and physicians with respect to benefit design implications
Q by promoting the use of lower-cost generic alternatives
Q by implementing utilization management programs such as step therapy and prior authorization, which focus the
use of medications according to clinically developed algorithms
We also provide formulary compliance services to our clients. For example, if a doctor has prescribed a drug that
is not on a client’s formulary, we notify the pharmacist through our claims processing system. The pharmacist may then
contact the doctor to attempt to obtain the doctor’s consent to change the prescription to the appropriate formulary product.
The doctor has the final decision-making authority in prescribing the medication.
We also offer innovative clinically-based intervention programs to assist and manage patient quality of life, client
drug trend and physician communication/education. These programs encompass comprehensive point of service and
retrospective drug utilization review, physician profiling, academic detailing, prior authorization, disease care management
and clinical guideline dissemination to physicians.
Medicare Part D and Medicaid Products. We support clients by providing several program options: the Retiree
Drug Subsidy program, which is offered by CMS to reimburse municipalities, unions and private employers for a portion of
their eligible expenses for retiree prescription drug benefits; the Employer Group Waiver Plan, a group-enrolled Medicare
Part D option for employers and labor groups; as well as serving as the “PBM inside” for a number of Medicare Part D
sponsors that offer drug-only and integrated medical and Medicare Part D drug benefits. As a PBM supporting health plans,
we provide prescription adjudication services in addition to a suite of required programmatic offerings such as a Medication
Therapy Management program, Explanation of Benefits for members using prescription services and a variety of member
communications related to their prescription benefit. We also offer an individual prescription drug plan which is offered to
beneficiaries in all 34 Medicare regions across the U.S., as well as Puerto Rico.