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Employers Seek New Ways to Offer Workers Prescription Drug Benefits in Face of Rising Costs 2003 Prescription Drug Benefit Cost Survey Report Released, Sponsored by Takeda Pharmaceuticals North America

October 17, 2003

Montreal, Canada, October 17, 2003 – Employees continue to enjoy access to prescription drug benefit plans despite rising drug prices, according to the 2003 Prescription Drug Benefit Cost and Plan Design Survey Report . The report, released Friday, October 17 at the Academy of Managed Care Pharmacy’s educational meeting in Montreal, shows employers are working with pharmacy benefit managers to maintain quality employee benefits.

The Survey Report discusses many of the day-to-day issues drug benefits managers face. The report documents the decisions organizations are making about drug exclusions, cost sharing, utilization management programs, pharmacy network design and pharmacy reimbursement rates.

Pharmacy Benefit Management Institute (PBMI) of Tempe, Ariz., collected and analyzed the data and published the survey findings, which feature responses from 535 employers representing more than 17 million beneficiaries of the nation’s larger employers. Takeda Pharmaceuticals North America (TPNA), Inc., underwriter of this year’s report, has been funding its production since 2000.

“Employers today walk a delicate balancing act when it comes to prescription drug benefits for their employees,” said Steve Shockley, national director, managed markets, TPNA. “The purpose of this survey is to provide critical information to the health care industry about prescription drug benefit trends and issues so that employers, in turn, can make the best decisions for their companies and their employees.”

Key Study Findings

Cost sharing is rising. Survey Report findings show that co-payments increased in both mail and retail categories, however, the growth is more pronounced in mail service. From 2001 to 2002, average first-tier mail service co-payments increased by 16 percent, second-tier by 20 percent, and third-tier by 10 percent. Retail co-payments increased by approximately 10 percent from 2001 to 2002. Twenty-six percent of employers are using co-insurance for second-tier, retail cost sharing, compared to 22 percent in 2001.

Employers increasingly embrace disease management programs. More employers are beginning to offer workers some type of disease management program (53 percent) for chronic conditions like asthma, heart disease and diabetes, according to the report. Employers and drug benefit managers increasingly see such efforts as a good starting point for managing illnesses, yet more research is needed to fully quantify the impact of disease management programs.

Formulary use continues to rise . Since 1995, the number of employers using a formulary has jumped from 54 percent to 89 percent. Overall, open formularies continue to decline in popularity, with only 35 percent of employers reportedly offering the option to workers. Instead, employers are opting for incented formularies. In 2002, 63 percent of employers offered incented formularies, up from just 25 percent in 1999. Subsequently, use of closed formularies, which exclude selected drugs within a category of drugs that are already covered, is down to 2 percent.

About Takeda
Based in Lincolnshire, Ill., Takeda Pharmaceuticals North America, Inc. is a wholly-owned subsidiary of Takeda Chemical Industries, Ltd. in Osaka, Japan. Takeda is a research-based global company with its main focus on pharmaceuticals. As the largest pharmaceutical company in Japan and one of the industry’s leaders worldwide, Takeda is committed to strive toward better health for individuals and progress in medicine by developing superior pharmaceutical products.

To order a complimentary copy of this report, visit PBMI’s Web site at www.pbmi.com. If you have any questions please do not hesitate to call Michael Deskin at (480) 730-0814 or Peter Sonnenreich at (202) 338-8256.

To protect the confidentiality of the survey respondents and to ensure the independence and objectivity of this report, Takeda Pharmaceuticals North America, Inc. does not have access to the individual responses or raw data gathered by this survey – nor do any other third parties.

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