Health plan reports 63% savings by outsourcing drugs to Canada and New Zealand

Montgomery County officials celebrated a significant achievement in prescription drug cost management during their recent Zoom meeting on December 23, 2024. The county reported a remarkable increase in the use of generic medications, now reaching 92%, up from 80%. This shift is expected to lead to substantial savings for both the county and its members.

The discussion highlighted that members are currently paying an average of $10 for generic drugs, which is a stark contrast to the average cost of brand-name drugs at approximately $7.70. This positive trend in generic drug utilization is seen as a key factor in controlling healthcare costs.

In addition to the focus on generics, the meeting also covered the county's script sourcing program, which allows members to obtain medications from international sources like Canada and New Zealand. This initiative has resulted in impressive savings, with year-to-date costs showing a 63% reduction compared to traditional pharmacy benefit management (PBM) costs. The PBM would have charged $388,000 for certain drugs, while script sourcing brought that cost down to just $143,000.

Officials expressed satisfaction with these developments, noting that the specialty drugs are now significantly below benchmark costs. However, there was some concern regarding member participation in health programs, such as the gym core and diabetic management initiatives, which have not seen the expected engagement levels.

Overall, the meeting underscored Montgomery County's commitment to enhancing healthcare affordability and efficiency, with plans to continue monitoring and improving these programs in the future.