WISCONSIN: state-supported transparent PBM keeps drug costs in check

“State insurance system touted as 'best in country'”

By Anita Weier, Maidon.com, June 26, 2006, excerpt:

“The co-chairwoman of a state Senate panel on health care reform says the insurance system that serves 230,000 state and local government employees, retirees and their beneficiaries is blazing a path toward more efficient and less costly health care. "Wisconsin has a shining example" to offer, said Sen. Alberta Darling, R-River Hills. "The state changed to a three-tier insurance system and developed a prescription initiative that is very strong. This is the best in the country, and other states are looking at it." The state program has reduced cost increases to about half the level of most public and private sector employer plan increases during the past two years, officials said. Wisconsin's State Employee Group Health Program covers all state and university employees and retirees, and a related Wisconsin Public Employer Program is an option for local governments that participate in the Wisconsin Retirement System. ... Drug costs: The second major change was the consolidation of prescription drug benefits under one pharmacy benefits manager, Navitus Health Solutions, a Wisconsin company that was created to meet the state's needs. The Group Insurance Board demanded complete transparency in all financial transactions with drug manufacturers and that all rebates and savings from discounts be passed through to the plan, which also has greater purchasing power due to consolidation. Navitus created a committee of pharmacists and physicians from across the state who developed a list of preferred drugs and chose the best in each class. The board changed the drug benefit under the program from a two-level co-pay structure to a three-level co-pay structure. The first level, mostly generics, cost $5 per prescription, the second level $15 per prescription, and the third level $35 per prescription. "In the first two years, tens of millions of dollars have been saved," Korpady said, adding that premiums for retired state employees actually went down by more than 6 percent last year. "At the same time, benefit levels have been maintained and high quality and safety have been encouraged and rewarded," Korpady said. "In almost every category of wellness and disease management, our health plans exceed the national averages." Other common features include nurse hotlines, smoking cessation programs, fitness benefits and targeted disease management programs, he said.”