How Metric Based Pricing Can Contain Pharmacy Expenditures


Lipitor and Metric Based Pricing

The following is an example of the potential savings that are being achieved in pharmacy plans using metric based pricing.

The brand-name cholesterol medication, Lipitor, has  been one of the most popular and best-selling medication brands in the U.S., ranking seventh on a list of the 10 most popular drugs of 2017. With an average cost to the plan of approximately $184 per script, Lipitor was not only popular but also quite costly.

Therefore it was with great relief to plan sponsors when a generic version of Lipitor, atorvastatin, came on the pharmacy market.  The cost was only $36 per fill. As a result, in the last two years most plan sponsors  applied incentives to shift members from Lipitor to atorvastatin.

However, the story does not end there. Just because a drug is a generic doesn’t mean it is the lowest cost alternative.  There is another therapeutic equivalent in this category that lowers LDL cholesterol  as effectively as Lipitor and atorvastatin, called simvastatin.

Simvastatin is based on a different active ingredient, but yields the same clinical impact on the underlying disease.  It costs only $7 per fill—an additional $29 in savings per script and per employee.

The Lipitor/atorvastatin/simvastatin example shows the impact a more sophisticated metric pricing programs will have over simple mandatory generic programs.  To recap, the costs per filled prescription  range as follows:


Lipitor $184
Atorvastatin $36
Simvastatin $7


As this example illustrates, the potential savings associated with switching employees and their families to therapeutic equivalent drugs is significant.  However, available alternatives and their pricing change frequently.  It is imperative for your plan to seek assistance in keeping up-to-date on drug pricing and availability within your plan to ensure  you maintain the appropriate  switching logic in order to streamline savings.

Fortunately,  there are organizations devoted solely to the science of medication switching. They partner with your pharmacy plan to  provide access to sophisticated algorithms to identify appropriate drugs to target, the clinical equivalent options, and the appropriate switching logic.  They accomplish all this and also tailor your pharmacy plan to reflect the specific medications the members are prescribed.

Metric pricing experts also help plan sponsors routinely check prices of existing and new-to-market drugs to  identify all cost-saving opportunities.  They also support and streamline member communications to create greater involvement in their personal healthcare, as well as to provide information to assist with discussions with physician of the possible advantages or issues of switching to a lower-cost medication.

Since the total employer cost of pharmacy to overall health benefit costs averages nearly 20%,  it’s time for plan sponsors to investigate and implement new types of cost-savings programs.   Employers can achieve an average savings of 15% to 30% on overall pharmacy plan costs.  It will also  save its employees an average of 10% to 15% per prescription.

Please call or email us for a review of your current plan and what an alternative pharmacy benefit manager with metric pricing can save you.