Strong pharmacy management connected to caregivers reduces overall costs

Better pharmacy management starts with a formulary created by doctors and pharmacists—not the health plan. It also includes lower-priced prescriptions, higher generic prescribing, and electronic medical records to make sure members take medications as prescribed. And it links back to ensuring your employees get the right care at the right time. Employees with chronic conditions account for 8 out of every 10 prescriptions, so it’s important to make sure their caregivers and pharmacists are working together to improve health.1

Pharmacy cost management

A Better Way

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At Kaiser Permanente, pharmacy services are included as part of our collaborative approach to care. Pharmacists work closely with doctors and specialists, and share access to our electronic health record, enhancing safety, efficiency, and cost savings.

  • Greater cost management—we leverage our organizational purchasing power to manage costs from the start, negotiating prescription drug prices, buying drugs in bulk, and operating our own pharmacies and warehouses.
  • Standardized formulary—our safe, standard formulary of more than 850 preferred pharmaceuticals is developed by our physicians. They select drugs for the formulary based on clinical evidence and recommendations from our pharmacists, and regularly add or remove drugs based on evaluations of safety, efficacy, and cost-effectiveness.
  • Cost-effective prescriptions — on average, generic medications are from 30 to 50% less expensive than brand name drugs, with some being as much as 85% less. About 99% of the drugs we dispense are generic when a generic is available, resulting in considerable savings for employer groups while ensuring a high level of medical effectiveness for members.3
  • Preventing dangerous drug interactions in seniors—the average older adult takes 5 or more prescription drugs each day.4 With Kaiser Permanente HealthConnect®, our caregivers instantly see all of the medications our senior members have been prescribed, and receive automated alerts to help prevent dangerous drug interactions.
  • More informed members—we offer pharmacist consultations for all new and changed prescriptions. That results in additional savings because we’re helping your employees understand how and when to take their medications, and what to do if they miss a dose.

The other way

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  • More missed workdays—24% of consumers don’t pick up the prescriptions their doctors order for them.5 It’s even worse for people with chronic conditions—up to 60% of people with high blood pressure don’t take their medications as prescribed, and they miss twice as much work as healthy employees.6
  • High-cost prescribing—doctors admit that they prescribe more expensive brand-name drugs, when patients asked for them, 67% of the time.7 Brand-name drugs can cost 80 to 85% more than equally effective generics.8
  • Heavy reliance on retail pharmacies—for-profit, retail pharmacies filled 73% of U.S. prescriptions in the first half of 2011, and many have to answer to shareholders. They’re more focused on turning a profit than helping you reduce your pharmacy costs.9
  • Lack of coordination leads to deaths in older adults—according to the Centers for Medicare & Medicaid Services, seniors with multiple chronic conditions see an average of 14 different doctors and fill or refill 50 prescriptions a year. If doctors aren’t aware of what other medications their patients have been prescribed, it can lead to dangerous, even deadly, drug interactions. Known as “polypharmacy,” this causes an estimated 100,000 deaths in older adults each year.10
Better pharmacy care reduces absences
Choose better pharmacy management.



1 Healthcare Spending Among Privately Insured Individuals Under Age 65, IMS Health, 2012.
2 Kaiser Permanente data, Generic Dispensing Rate, Pharmacy Operations, March 2012.
3 Kaiser Permanente data, Pharmacy Operations, July 2014.
4 Marlo Sollitto, “Dangerous Drug Interactions: Medicines at War Within the Body,”, accessed July 9, 2013.
5 Michael A. Fischer, MD, MS, et al., “Trouble Getting Started: Predictors of Primary Medication Nonadherence,” American Journal of Medicine, November 2011.
6 The Relationship Between Medication Adherence & Productivity, workspan, November 2011.
7 “MDs Often Prescribe Advertised Drugs,” FierceHealthcare, January 10, 2007.
8 See note 3.
9 2000–2011 Survey Results: Pharmacy Benefit Trends and Data, Chapter 6: PBM Prescription Volume and Mail-Order Growth, Atlantic Information Services, 2012.
10 “More People with Medicare Receiving Free Preventive Care,” Centers for Medicare & Medicaid Services press release, June 20, 2011; Marlo Sollitto, “Dangerous Drug Interactions: Medicines at War Within the Body,”, accessed July 9, 2013.