You Need to Consider Drug Mix and Plan Design

Implications: It is universal that the mail order distribution channel has lower generic utilization than the retail channel.   PBM pricing is always better for mail order scripts versus retail.  In addition, plan design is a major component of net claim costs.

Analysis: Generic utilization for the mail order channel is always lower than the retail channel because of the mix of drugs dispensed at mail.  Only maintenance drugs are dispensed at mail and there are not as many generic substitutes for these drugs as exist for acute drugs, which typically are dispensed only at retail.  

Regarding cost per days supply, it is true that plan sponsors sometimes pay a higher claims cost per days supply of drug but it is because of the underlying plan design.  PBM's always offer greater AWP discounts, greater rebates, and generally zero dispensing fees for mail order scripts.  What can create a higher net cost per day for the plan sponsor is if the employee copay is not set high enough for mail order scripts.  My point is that the PBM does not control employer plan design; employer's can remedy this by adjusting their copays/coinsurance.