Thursday, June 11, 2015

The 90-Day at Retail Boom

Below you'll find our exclusive analysis of the prevalence of 90-day prescriptions, categorized by dispensing format. As you will see, 90-day scripts have nearly doubled at retail pharmacies. They now account for more than one in nine prescriptions at chain stores and supermarkets.

These data provide more insight into the market share trends revealed in 2014’s Winners and Losers: Prescription Market Share by Dispensing Format, which we published on Tuesday. Retail pharmacies are accepting lower reimbursements for 90-day prescriptions to compete with mail pharmacies, which have consequently lost market share.

So grab your flannel shirt, blast your Jagged Little Pill CD, tickle your Elmo, and let’s take a spin through the 90s.


An extended-supply prescription for a traditional drug is typically three times as large as a 30-day retail prescription. Hence, they are referred to as 90-day prescriptions. These are most suitable for dispensing refills of maintenance medications—drugs taken on a recurring basis to treat such chronic illnesses and conditions as depression, high blood pressure, heart disease, asthma, and diabetes.

Using the data in an appendix to IMS Health’s Medicines Use and Spending Shifts: A Review of the Use of Medicines in the U.S. in 2014 and some algebra, we computed the prevalence of 90-day prescriptions by dispensing format. Here’s what we found:

[Click to Enlarge]

A few observations on these data:
  • As expected, 90-day scripts constitute the majority of mail pharmacy dispensing activity. 
  • The share of total prescriptions at chain stores has nearly doubled, from 6.5% in 2010 to 11.6% in 2014.
  • Independent pharmacies have lagged in filling 90-day prescriptions. These scripts, however, now account for 1 in 13 independent drugstore scripts.
So, I guess life is like a box of chocolates. Kudos to Forrest's mom.


The growth shown above reflects fundamental changes in both retail pharmacies’ competitive position and payers’ benefit strategies.

Pharmacy reimbursement formulas typically make 90-day mail prescriptions less expensive for both payers and consumers. In the early 2000s, this encouraged the substitution of PBM-owned mail pharmacies for community retail pharmacies.

The economic advantage is vanishing, however, as payers allow community pharmacies to fill 90-day prescriptions for maintenance medications.

According to the PBMI’s 2014-2015 Prescription Drug Benefit Cost and Plan Design Report, 61% of employers allowed community pharmacies to fill 90-day prescriptions for maintenance medications. The PBMI data also show that average “90 day at retail” reimbursement reduces the cost gap between mail and retail community pharmacies both for consumers and third-party payers. Here are the key numbers:
  • In 2014, the average employee copayment for a 90-day preferred brand prescription at a store-based retail pharmacy was $60—comparable to the mail pharmacy copayment amount.
Multiple states have enacted anti-mandatory mail order (AMMO) legislation that blocks plan sponsors from favoring mail pharmacies. Consequently, retail pharmacies can fill 90-day prescriptions—as long as they accepted lower mail pharmacy reimbursement rates. DOH!

Plan sponsors are also adopting narrow network models that increase 90-day at retail prescriptions. CVS Caremark’s Maintenance Choice program is the most prominent model for commercial plan sponsors. Under the program, a beneficiary can obtain maintenance medications from either a CVS retail pharmacy or a CVS Caremark mail pharmacy. This model permits consumer choice of pharmacy channel (mail or retail) but limits the choice to CVS Caremark outlets. Thus, a payer saves money whenever a consumer fills a 90-day prescription at a CVS retail pharmacy at mail pharmacy pricing—instead of three 30-day scripts at a CVS or non-CVS retail pharmacy.

Look for more growth in the 90s…or no soup for you!

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