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New plan harmonizes drug coverage

Editor’s note: This article is the fourth in a series submitted by the Benefits Office on the University’s new prescription drug plan, which begins Jan. 1, 2003. Previous articles have announced the University’s decision to consolidate pharmacy purchasing under a single Pharmacy Benefit Manager—AdvancePCS—and to carve out the prescription drug benefit from medical plans. This article looks at drug harmonization decisions that affect all plan members, regardless of their medical insurance. The next article in the series will discuss preferred and non-preferred drugs and the plan’s new mail order program.

One of the advantages of consolidating the pharmacy benefit for the University’s eight medical plans is that members of those plans now will have consistent coverage for prescription drugs.

While the pharmacy benefits within medical plans currently cover most commonly prescribed drugs, some disparities exist between the plans’ coverage and rules. For example, some insurers do not cover psychiatric drugs and oral contraceptives and devices.

The new plan will “harmonize” and expand drug coverage for all members. Beginning Jan. 1:

  • Members of BlueCross BlueShield of Michigan/United of Omaha and their dependents, as well as retirees and their dependents, will have coverage for psychiatric drugs.
  • Members of Care Choices, CMM, and BCBSM/United of Omaha, in addition to all other U-M medical plans, will have coverage for oral contraceptives and devices.
  • The new plan covers fertility medications for patients through age 44, up to $5,000 per lifetime per family.
  • Diabetic insulin, needles and syringes are covered with no co-payment, and other diabetic supplies—alcohol swabs, testing strips, blood glucose monitors and lancets—will be covered at regular co-payment levels.
  • Smoking cessation support drugs will be covered with a 90-day supply per year limit.
  • Some self-administered injectable medications, such as insulin, allergic emergency kits, anti-migraine agents and B-12, will be covered.

“The University has taken a strong stand with insurance carriers in saying that we believe everyone should have equal access to prescription drugs,” says Jeoffrey Stross, professor of internal medicine and chair of the U-M Pharmacy Benefit Advisory Committee (PBAC). “I think this is very good news for the entire University community.”

Drugs excluded from coverage under the plan include experimental or unproven drugs, over-the-counter medications, cosmetic drugs, weight-loss drugs and fluoride dental products. “Our pharmacy plan, like most others, excludes weight loss drugs because of significant side effects. The risk-benefit ratio is not acceptable,” Stross says.

A complete list of excluded drugs, as well as the University’s Preferred Drug List (PDL), recommended to physicians for prescribing, will be available on the new cobranded Web site,, which will be up by Oct. 1.

Approval of a new drug by the federal Food and Drug Administration does not guarantee coverage by the plan. New drugs will be covered after the University’s Pharmacy Benefit Manager, AdvancePCS, and the PBAC have thoroughly reviewed those medications for safety, efficacy and cost effectiveness. This process generally takes one to two months, according to Stross.

Formed last June, the PBAC is a committee of physicians, pharmacists and Benefits Office staff members who develop and update the PDL and report to the U-M Pharmacy Oversight Committee. The committee is a faculty and staff group that advises the University executive officers on implementation of the new drug plan.

The University has decided to cover prescription drugs that support smoking cessation in view of the high mortality rate associated with tobacco use, says Stross. The medical costs of smoking-related disease are far greater than the pharmacy costs of drugs like Zyban, he says. “For years, doctors were prescribing Zyban to smokers as an anti-depressant because their plans did not cover the drugs their patients really needed,” he says.

The decision to cover insulin, needles and syringes at zero co-payment for diabetics also is an enlightened approach, Stross says. “We want to eliminate every possible barrier to treatment of diabetes. Access to insulin is critical to preventing complications from the disease,” he says.

While fertility drugs are expensive, the University will cover them up to $5,000 lifetime per family. The PBAC based the limit on data that shows $5,000 would cover costs for about 90 percent of people who need those medications.

Under the new plan, a few drugs will require a prior authorization procedure. If physicians prescribe any medications on the Prior Authorization list, they must contact AdvancePCS and provide clinical information to meet pre-approval criteria. The physician may have to verify “medical necessity” before the plan pays benefits for the drug. The Prior Authorization list will be posted and updated on the U-M/AdvancePCS Web site starting in October at

Similarly, physicians must provide documentation to support a “medically necessary” appeal if the plan denies coverage of a drug. No appeals will be accepted for a lower co-payment level. The University will provide the criteria to apply for an appeal to AdvancePCS and will review all data provided for appeals.


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