Measuring economic impact of applying daily average consumption limits

Bridget M Flavin, Lynn M Nishida, Sean H Karbowicz, Mark E Renner, Ruth J Leonard
Journal of Managed Care Pharmacy: JMCP 2014, 20 (2): 159-64

BACKGROUND: Health plans may achieve cost savings by limiting the daily average consumption (DACON) of certain medications and encouraging members and prescribers to select lower cost dosing options. Various strengths of a given medication may be similarly priced per unit; therefore, a single unit of a higher-strength medication may cost less than multiple lower-strength units that provide the same dose. For instance, a single 10 mg tablet may cost less than two 5 mg tablets. 

OBJECTIVE: To measure the economic impact of implementing DACON limits for selected medications. 

METHODS: RegenceRx prescription claims data for the top 200 brand and select generic medications from the first quarter of 2011 were searched for DACON limit opportunities. DACON limits were placed on medications that were available in multiple strengths that were similar in cost, and at least one strength was double another (e.g., 5 mg and 10 mg).Phase 1 of the program occurred in December 2011 and consisted of messaging to dispensing pharmacies (either electronic or direct contact). In Phase 2 (effective January 1, 2012), the claims system was coded to prevent payment for prescription claims in quantities exceeding DACON limits ( greater than 1.9 tablets/day). During this phase, dispensing pharmacists received electronic messaging at the point of service recommending a transition to the least costly dosing option. If the dispensing pharmacist determined transition was not clinically appropriate, the pharmacy was able to contact RegenceRx customer service for an override.Impact was determined by analyzing prescription claims for the selected medications for the 3 months following implementation of DACON limits (January-March 2012). Specific measurements analyzed included number of claims not paid because of exceeding DACON limits, health plan administrative burden, and cost avoidance. 

RESULTS: DACON limits were placed on 41 medications for commercial lines of business and 35 medications for Medicare Part D lines of business, based on the medication selection criteria (DACON limits were not placed on classes of clinical concern for Medicare Part D). A total of 5,100 claims across both commercial and Medicare Part D lines of business for January to March 2012 were impacted by implementation of DACON limits at the point of service. Duloxetine, niacin CR, and generic temazepam were responsible for more than 60% of the DACON limit claims volume. Implementing DACON limits resulted in a total cost avoidance of approximately $730,000 across both commercial and Medicare Part D lines of business for January to March 2012. Duloxetine, niacin CR, and aripiprazole were responsible for nearly 60% of the total aggregate cost avoidance. After adjustment for health plan administrative costs, the total cost avoidance was just under $720,000. 

CONCLUSION: Implementing DACON limits on selected medications provided a cost avoidance of approximately $720,000 over a 3-month period with limited interruption to patient access and relatively low administrative burden. This reduction could result in annualized savings of nearly $3 million. 

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