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Prescription Plans Bring Consumers Closer to PBMs

Kate Traynor

Discount and online pharmacies are getting competition from pharmacy benefit management company (PBM)-allied plans that sell prescription drugs directly to consumers.

PBMs such as Merck-Medco Managed Care L.L.C. and PCS Health Systems Inc. have expanded their customer bases to include nonmedical groups that market prescription services directly to the public. Consumers pay a fee to join a plan, obtaining access to discounted prescription-drug prices. 

Although the programs have membership restrictions, just about anyone can find a plan to join. Many programs are available. Three of the larger plans are discussed here. 

SaveWell, established in August 1999 as a subsidiary of Medical Mutual of Ohio, provides prescription services through the Merck-Medco PAID network. Prescriptions can be obtained through the mail or at participating community pharmacies. A year's membership costs $52 per family. The primary subscriber must be at least 18 years old, but family members of any age can enroll at no additional charge. 

According to Medical Mutual of Ohio, SaveWell customers saved $1.1 million on prescriptions in the first eight months of the program. The program enrolled 25,000 customers in its first year. 

Hospitals, too, have shown an interest in SaveWell, said Aaron Graham, director of business development. Drugs dispensed at no direct cost to patients during a hospital stay become their financial responsibility after discharge. With programs like SaveWell, Graham noted, more patients can afford to continue their drug therapy after leaving the hospital. 

YOURxPLAN, launched in April, is a prescription plan jointly sponsored by Merck-Medco and The Reader's Digest Association Inc. Like SaveWell, YOURxPLAN primary members must be 18 or older, and family members of any age can also join. Membership costs $25 per year for individuals, or $40 for families. Anyone not enrolled in a separate prescription plan administered by Merck-Medco can join the program. 

Members who buy certain brand-name drugs—some made by Merck & Co.—from YOURxPLAN receive a 10 percent cash rebate by mail each quarter. 

The American Association of Retired Persons (AARP) also offers a discount prescription plan. For a $15 annual fee, association members can use the AARP Health Care Options Prescription Savings Service. A member's spouse can enroll for an additional $15. 

Retired Persons Inc., an independent company that provides prescription services for AARP, contracted with PCS this past February to administer the new discount drug program. 

Besides offering prices competitive with those at online and mail-order pharmacies, PBM-allied plans let members choose who fills their prescriptions. "If you don't have prescription coverage, you're not well-to-do and probably don't have access to the Internet" and online pharmacies, said SaveWell's Graham. 

With a large number of Medicare-eligible clients who Graham said "aren't comfortable going to a mail order source," SaveWell conducts nearly all of its business with community pharmacies. Only about 10 percent of business is through the mail. But Graham said that SaveWell encourages its customers to use Merck-Medco's mail-order pharmacy, where prescriptions generally cost less than in the community.