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Mail-Order Pharmacy Service Saves Customer, DoD Dollars
02-Sep-2006: More military health system beneficiaries are opting to have prescriptions mailed to their homes, rather than picking up medications at installation or commercial-sector pharmacies, a military health care official said here yesterday.
Defense Department officials welcome this development as part of ongoing efforts to control rising health care costs, and, as a means to save beneficiaries' hard-earned dollars, Capt. Thomas J. McGinnis, chief of pharmacy at the office of the assistant secretary of defense for health affairs, said.
"Our big issue here is our rising drug costs," said McGinnis, a U.S. Public Health Service officer. DoD spent $5.4 billion last year to provide pharmaceuticals to beneficiaries, he said.
"This year, in fiscal year '06, we're predicting we're going to spend $6 billion" on pharmaceuticals, McGinnis said.
"We're trying to do everything we can to save money," McGinnis explained, "to sustain this great prescription drug benefit our beneficiaries have."
The Congressional Budget Office estimates that DoD will save $1.5 billion from 2007-2016 by transferring prescription delivery from retail pharmacies to mail-order service, according to a Tricare Management Activity news release. The TMA manages health care plans for military members, retirees and their families.
The number of mail order prescriptions delivered to beneficiaries in July topped June's total, the release said, moving mail order prescriptions to 7.4 percent of the total number of prescriptions that Tricare fills, the highest level in two years. In the same period the number of prescriptions filled at military treatment facilities and retail pharmacies dropped.
DoD gets discounted purchase-price rates on pharmaceuticals that are dispensed at military treatment facilities or by mail order, McGinnis pointed out.
"We don't get federal pricing at the retail pharmacy, so DoD saves about 40 percent on all medications dispensed from the mail-order pharmacy," he said.
Mail-order prescription delivery also makes economic sense for Tricare beneficiaries, McGinnis said, noting they pay a $9 co-payment for each brand-name prescription, and $3 for each generic drug prescription.
The kicker, he said, is that retail pharmacies dispense 30-day prescriptions, while mail order prescriptions are filled in 90-day supplies.
Accordingly, customers taking long-term administered drugs need to obtain more prescriptions via the over-the-counter method. As a result, Tricare customers can save as much as $72 each year, per brand-name prescription, McGinnis explained, by using the mail order service. The number of a customer's prescriptions, he said, multiplies such savings.
Some customers would want to obtain certain prescriptions, such as pain relievers, more quickly over the counter, McGinnis acknowledged. But, overall, it's more convenient for beneficiaries to have most of their prescriptions mailed to them, he said, noting they wouldn't have to use up time to go to the pharmacy.
"It's delivered right to your home," McGinnis said. "You don't have to get into the car and go downtown to the pharmacy."