In 2005, only 6 percent of the 6.6 million military beneficiaries with prescriptions to fill used the low-cost Tricare mail-order program. By contrast, 51 percent had at least one prescription filled through Tricare’s more costly retail network.
The rising popularity of the retail drug benefit versus near flat-line usage of mail order means that thousands of beneficiaries pay more than necessary for their medicines, said Capt. Thomas McGinnis, chief of pharmaceutical operations for Tricare.
It also means the Defense Department pays millions of dollars more than it could for drugs. Every prescription filled in Tricare retail outlets, which reached 50 million last year, costs the government 30 percent to 40 percent more than prescriptions filled by mail.
McGinnis is leading the first campaign by Tricare to increase mail-order use. It will begin with an effort to educate beneficiaries on the convenience and cost-savings of prescriptions by mail. Then, as early as October, unless Congress intercedes, Tricare will restructure pharmacy co-payments so mail-order prescriptions become more attractive, and retail less so.
With military pharmacy costs nearing $6 billion a year, Tricare leaders in December raised pharmacy operations to directorate level and appointed McGinnis as the first chief. A Public Health Service officer, McGinnis spent his first 28 years in uniform with the Food and Drug Administration. His last assignment was as FDA’s director of pharmacy affairs.
“Prescription drug costs are our biggest worry,” he said.
Expanding the use of mail order is his first priority. From April 2001 through September 2005, the number of prescriptions for military beneficiaries filled by mail rose 30 percent, while the number filled in the Tricare retail network jump 250 percent.
First, McGinnis said, beneficiaries need to understand that mail-order users already save 66 percent on co-payments, because prescriptions filled by mail provide a 90-day supply versus 30 days in the retail network.
Second, the government saves on each prescription not filled in the retail network. The reason is that drug stocks on base and for mail order are purchased at price discounts. Drug manufacturers argue that federal pricing doesn’t apply to the Tricare retail network because drugs aren’t dispensed there by government pharmacists. The department has filed a lawsuit challenging that position.
A third factor to consider, McGinnis said, is the convenience of mail order. Patients avoid the cost of traveling to a retail outlet or a military base. They also avoid the hassles of base security checkpoints, of finding parking in crowded lots, and of long lines to get their medicines.
“For small co-pays, they get home delivery,” McGinnis said.
Generic drugs also lower costs. Tricare has a mandatory generic substitution policy. Any prescription for a brand-name drug must be filled by generic medicine of identical ingredients and strength, if available.
Tricare officials hope to use a change in co-payments not only to encourage more beneficiaries to use mail order but also generic drugs. The plan would end the $3 co-payment on mail-order generics. At the same time, the co-pay for the retail network would rise from $3 to $5 for generic and from $9 to $15 for brand-name drugs.
Sydney Hickey, a health benefits expert with the National Military Family Association, said an aggressive educational effort of the mail-order program is long overdue.
“We have been after the department for years to do it,” Hickey said. “They have wasted a great deal of money.”
Tricare and other members of the Military Coalition, an umbrella group of service associations and veterans groups, believe all drugs ordered by mail should be free, not just generics, Hickey said.
The Defense Department’s Pharmacy and Therapeutics Committee must review the department’s co-payment plan and forward its recommendations to William Winkenwerder, assistant secretary of defense for health affairs, for concurrence.
But that would appear to be a mere formality, since Winkenwerder for months has pressed for restructuring of co-payments to curb drug costs.
Congressional approval isn’t required, McGinnis said, though lawmakers could block the changes. If they don’t, the co-pay changes could take effect in October.
Free generic drugs should be a strong incentive to use mail order, McGinnis said. Beneficiaries on maintenance medicines are the logical users.
To learn more about the Tricare Mail Order Pharmacy, go to www.tricare.osd.mil/pharmacy/tmop.cfm.
To comment on column, send e-mail to milupdate@aol.com or write to Military Update, P.O. Box 231111, Centreville, VA, 20120-1111.
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