Despite Health Plans’ Restrictions on Prescription Drug Coverage, Costs Expected to Rise 14% to 19% Next Year

Despite "aggressive" cost control programs undertaken by health plans, officials still anticipate the plans' prescription drug expenses will increase 14% to 19% next year, the Boston Globe reports. In Massachusetts, the three largest health plans, which have a combined membership of four million people, all require doctors to obtain prior approval before prescribing many medications; Blue Cross and Blue Shield of Massachusetts require approval for 25 drugs, while Tufts Health Plan and Harvard Pilgrim Health Care have 47 and 14 drugs on their prior-approval lists, respectively. Tufts estimates that it saves $10 million to $20 million per year through the list, and plan officials say without such controls, their drug expenses would have risen 20% last year instead of 14% to 15%. Even with the restrictions, plans' drug costs have continued to rise, partly as a result of "aggressive" drug company advertising, particularly direct-to-consumer campaigns, health plan officials say. The introduction of new drugs for previously untreatable or unrecognized conditions also is driving up costs, the Globe reports. To control costs further, health plans are looking at practices such as physician profiling, which was implemented by Blue Cross in June, under which doctors receive quarterly reports detailing their prescription history and comparing it to that of their peers. The reports also note how many times doctors prescribed specific brand-name drugs such as the arthritis treatment Celebrex instead of lower-cost alternatives. Many doctors are wary of such cost-cutting measures, saying they are unsure whether the companies are requesting alternative drugs because the medications are actually better or because they want to save money. Dr. John Goodson, an internist at Massachusetts General Hospital, said, "As physicians, we don't know who to trust anymore" (Kowalczyk, Boston Globe, 8/29).