November 1, 2011
External Affairs Branch
Robert Udall Glazier, Deputy Executive Officer
Brad Pacheco, Chief, Office of Public Affairs
Contact: Bill Madison, Information Officer
Pharmacy Benefit Changes for CalPERS Health Plan Members in 2012
SACRAMENTO, CA – Beginning January 1, 2012, CalPERS members will see a few changes in their health plan pharmacy benefits approved by the CalPERS Board of Administration earlier this year.
One change is a "member pays the difference" requirement. Under this new rule, when a doctor prescribes a brand name drug – and a U.S. Food and Drug Administration (FDA) approved generic equivalent is available – the member will pay the difference between the costs of the brand name and the generic drug. The member will also have to make the generic drug co-payment.
To use a hypothetical example, a doctor might write a prescription for a brand name drug for which a generic drug equivalent is available. The plan cost of a 30-day supply of the brand name drug is $100 and a 30-day supply of the generic drug is $15. The member preferring to use the brand name drug will pay the $85 difference plus the applicable $5 co-payment. The total cost to the member will be $90, versus $5, had the member selected the generic drug. A member may obtain an exception to the "member pays the difference" requirement if the prescribing physician provides thorough documentation that the member must use a brand medication and not the generic equivalent.
Another change is that the co-payment for retail pharmacy purchases of brand name drugs will increase by $5. Furthermore, the co-payment for 90-day mail order prescriptions of brand name drugs will be standardized at double the co-payment of a 30-day retail subscription; this means that members can receive a 90-day supply of a maintenance medication through the mail for the same price of a 60-day supply purchased at a pharmacy. There will be no increase in the co-payment for generic drugs bought at retail pharmacies or through the mail.
CalPERS Board members approved the increase in its members' share of pharmacy benefits due in large part to the fact that CalPERS is below the median copayment for preferred drugs. In addition, the employer share of pharmacy costs has risen over the past several years, while the member share has decreased. The last CalPERS pharmacy benefits co-payment increase was in 2001. The new co-payment structure will result in an alignment that brings CalPERS portion of pharmacy benefit costs to about half of where they were when the last co-payment increase occurred.
In June, the CalPERS Board of Administration awarded CVS Caremark the contract as the new Pharmacy Benefits Manager (PBM) for CalPERS self-funded Preferred Provider Organization (PPO) plans. CVS Caremark will replace the current PBM, Medco, in January 2012. PPO members will have a new option of obtaining 90-day supplies of maintenance medications at a CVS retail pharmacy. CVS Caremark's "Maintenance Choice Program" allows a member to enjoy same-day prescription availability and to talk face-to-face with a pharmacist while paying a low mail-order co-payment. More information on CVS Caremark and the transition of PBM services is available online at www.caremark.com/calpers.
CalPERS is the largest purchaser of public employee health benefits in California, and the second largest public purchaser in the nation after the federal government. CalPERS provides health benefits to more than 1.3 million State and public agency active and retired members at an annual cost of nearly $7 billion. For more information on CalPERS, please visit www.calpers.ca.gov.