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OSU employees benefit from pharmacy collaborative

Posted on | June 3, 2009 | 968 views |

By Adam King

The RxOC. It reads like a product that should be sold on a vitamin store shelf. The only boost you’ll get from this, however, is to your bottom line.

Known as the Rx Ohio Collaborative, the RxOC draws together the purchasing power of Ohio’s public sector employers to save money on pharmaceutical costs.

While nearly a dozen organizations are involved today, Ohio State was one of the four original members, along with the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the School Employees Retirement System of Ohio, when the RxOC launched Jan. 1, 2008.

That first year, OSU saved $3.55 million, or 9 percent of its drug benefit costs when it moved to new pharmacy benefit provider Express Scripts Inc., the second-largest provider in the country. Others who have joined have realized similar savings trending between 8 and 9 percent of their costs.

“When Wright State University was thinking about joining the RxOC, we showed them they were able to get pricing for 400,000 people instead of just the 6,000 or so lives their plans cover. They couldn’t believe the prescription drug costs were so low in our purchasing pool and would save them an estimated $300,000 on $3.3 million in annual pharmacy expenditures,” said Patti Nussle, associate executive director of the RxOC. “When state institutions and agencies are facing budget cuts, such a savings helps.”

The RxOC doesn’t plan on stopping with its current participants, which also include Ohio University, the Ohio State Highway Patrol Retirement System and Franklin County. The collaborative is open to any Ohio public institution or state agency that wishes to join, which means, according to Nussle, that more than
1 million people in the state could benefit from the RxOC.

Ohio State also could reach another pricing tier to realize more discounts as the RxOC grows.

“If we add 125,000 more lives, we’ll receive another discount,” Nussle said. “We’re at the highest discount available for the volume at this point, so the RxOC would have to grow significantly for us to take the next jump.

“Right now the state of Ohio employees and the Department of Administrative Services are considering joining the RxOC, bringing more than 125,000 employees. We’re also talking with the Inter-University Council and a number of other organizations.”

Out-of-state organizations have even called to inquire about the collaborative, but Nussle said the RxOC is focusing only on Ohio since there is still so much untouched territory here.

“We are focusing on expanding our pool because we feel strongly about our mission to help all Ohioans control their health care costs through lower prescription rates,” Nussle said.

The RxOC’s contract with Express Scripts runs through the 2010 calendar year and is renewable for another three years. That decision will be made by the RxOC steering committee, which consists of one representative from each participating group.

The four original members are on pace to save a projected $300 million by 2011. Ohio State is expecting to save the same or more in 2009 as it did in 2008 - savings that are passed on to health plan members by way of flat premiums and no increases in prescription copays or coinsurance.

Employees can save additional money by switching to lower-cost generic drugs when appropriate and participating in the Care Coordination program through Your Plan for Health if they have chronic conditions, such as asthma, diabetes or heart disease.

“The savings are all recognized by the OSU health plans, so it’s money the plans didn’t have to spend on drugs and can be spent on something else,” Nussle said.

The RxOC is housed at OSU’s Managed Health Care Systems. MHCS Executive Director and CEO Scott Streator said the collaborative has attracted the attention of the Ohio Board of Regents and the governor’s office for its effect on the state’s bottom line.

“In addition, the RxOC will benefit from the expertise of OSU experts, including the College of Pharmacy, and other state colleges to provide personalized pharmaceutical advice and support for maximizing the overall effectiveness of drug therapies for RxOC members and physicians,” Streator said.

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