Balancing Access and Cost Control in the TRICARE Prescription Drug Benefit

Format:

Book

Author/Creator:

Mulcahy, Andrew W.

Contributor:

Phillips, Brian

Whaley, Christopher M.

Language:

English

Place of Publication:

Santa Monica, Calif. RAND Corporation 2021

Summary:

The Military Health System provides health coverage — including prescription drug benefits — through the TRICARE program, which served an estimated 9.5 million beneficiaries in fiscal year 2018. Like commercial insurance and other sources of drug coverage, TRICARE uses formularies and other policies and tools to strike a balance between access to prescription drugs — in terms of which drugs are covered and where enrollees can receive drugs — and spending. Spending on prescription drugs typically increases as drug access becomes more generous. Unlike other sources of prescription drug coverage, TRICARE must also balance direct acquisition and distribution of drugs via military treatment facilities and mail-order pharmacies with payment for drugs dispensed in retail pharmacies. This report describes the TRICARE pharmacy benefit and the trade-offs in TRICARE pharmacy policies between increasing access and controlling costs. It presents six approaches that TRICARE should explore further to improve access, control costs, or both, including a more selective formulary, narrower pharmacy networks, and further harmonization with other federal purchasers, such as the Veterans Health Administration (VHA). These approaches are worth exploring in light of the recompetition of the TRICARE pharmacy contract and the ongoing consolidation of authority and management for purchased care under the Defense Health Agency.