Why current formulary management strategies are not enough


The pharmacy market has become fraught with hidden costs and confusion. As a result, employers rely on their consultants and PBMs to help them manage this important health benefit. Formulary management today hasn't changed much since the 90s when it was first designed. It focuses on managing drug spend based on who manufactured them, that is “brand” or “generic,” and giving preference to the presumably cheaper generic medications by putting drugs on different "shelves" or co-pay tiers. When multiple drugs for a condition exist, PBMs negotiate drug rebates from manufacturers based on their FDA-approved use.

But are these efforts enough to tackle the huge growth in pharmacy? In the US, we spend the most on health care compared to any other country, and yet our life expectancy is lower than average. Many voices across the country feeling we are not getting the most bang for our buck.

Comparative effectiveness research answers the question: what’s the best option?

Comparative effectiveness research shines a light and shows us exactly where we are getting great value, and where we are paying too much and getting too little.


Case Study: Generics are not always the lowest cost options


Take a look at the chart on the left. What you’re looking at is the comparative effectiveness of blood thinner drugs that help prevent a stroke in your legs or lungs (also called VTE). On the horizontal axis you can see the percent of people who did not have major bleeding, an important side effect to avoid with these drugs. On the vertical axis you can see the unit cost. All of these drugs are compared to the current “standard of care” that sits at 0 on the horizontal axis.

What’s easily visible is that there are two drugs that are similarly priced to the standard of care, but quite a bit better! It’s also very easy to see that there is a drug that is worse than the standard of care and so much more expensive. If you look closely, you’ll see the cheaper and better drugs are brands, and the expensive worse drug is a generic!

It seems implausible that a generic medication would cost more than a brand-name drug. However, that’s exactly what the comparative effectiveness data made very clear and easy to see. In this case, the data shows that a brand will improve your health outcomes and save you up to 88% on this treatment. We hope you’re now as curious as we are to see what else the comparative effectiveness data can reveal.


Case Study: Rebating by FDA indication does not always favor the best drug


Current practices also assume that a drug’s FDA approval status is sufficient proof of that drug’s comparative effectiveness. However, contrary to what even most doctors believe, FDA approval does not consider how a new drug compares to alternative treatments. When a PBM is negotiating rebates for drugs that treat a given condition, they often rely on FDA’s approved indication as a basis, and we will show you why this is a weak basis.

Let’s look at those same blood thinner medications again. When it comes to the use of blood thinners to treat atrial fibrillation (a heart condition), we found that the preferred product designated by one of the largest PBMs was both LESS effective and LESS safe compared to the two other products.

You might expect that the doctors prescribing these drugs would prescribe the most effective drug regardless of formulary coverage, but this did not turn out to be true for one client. In this case, 85% of doctors were prescribing the preferred product, despite the fact that it didn’t work as well as the alternative product, and only 10% of doctors were prescribing the drug with the best efficacy and safety data.

When we are talking about drugs that are designed to help prevent a heart attack or stroke, which would you prefer: the one that costs more than the current generic but works better, or the one that costs more than the current generic and works no better? When viewed through the lens of the best medical data, the answer is quite simple.

Why are we able to bring you this valuable data and others are not?

It’s simple: because we are experts in this field of research and we’ve developed an easy-to-understand business model that keeps us free from conflicts and aligned with you. 


Our database and analytics

We have leveraged established and cutting edge methodologies to build our comparative effectiveness database, working with experts and researchers in the field. We take care of maintaining it, reacting to every significant trial data release and drug approval.


Our business model

It was designed for simplicity and to eliminate any conflicts of interest – we only work for plan sponsors and have no revenue sources from industry players motivated by the sale of drugs, such as manufacturers or PBMs. We charge a flat fee on a per member basis.

Many sources generate valuable data about the comparative effectiveness of drugs. Where these organizations stop is where TruDataRx begins.


We apply comparative effectiveness research to pharmacy plan management. This research is widely available and of high interest to academic organizations and publishers such as the Institute for Comparative Effectiveness Research (ICER) and Cochrane Collaborative.  

Where these organizations stop is where TruDataRx begins.

We take their 1,000 page reports and synthesize the best clinical data into our proprietary algorithms supported and a user-friendly summaries. Applied to your pharmacy claims and formularies, we can easily demonstrate where the data suggests different strategies and subsequently, important improvements in outcomes and savings. 

What does this look like for your plan? 


Pharmacy plans are transaction-based, not risk-based. The better managed, the more you will save – today. But pharmacy plans are also important aspects of your company’s compensation package. Our algorithms seek out strategies that find the least amount of disruption for the most gain. For example, traditional strategies use blunt instruments, like cutting coverage for an entire class. We saved one client nearly 95% in a drug class by limiting coverage to the highest value drugs in the class and affecting only 11% of the members -- a tremendous savings with minimal disruption to members.  

How do we work with your HR teams? 


Because pharmacy is a transactional benefit, you don't have to wait to see savings -- strategies implemented efficiently could impact the next script written. But we understand your HR team is already overstretched. We work with your team to present the identified savings for your approval, and then develop a working process with your vendors to ensure the strategies are implemented accordingly with continuous monitoring. Never wonder if a program was worthwhile -- we provide instant feedback to ensure you never waste another dollar.