Tricare to Stop Covering Some Brand-Name Drugs at Retail Pharmacies

Starting next month, military families and veterans with Tricare coverage will have to pay out-of-pocket for certain brand-name drugs if they chose to fill their prescriptions at retail pharmacies.

The new rule only affects brand-name “maintenance medications” that are regularly taken to treat chronic health conditions. Drugs such as antibiotics that are intended to treat acute conditions will still be covered by Tricare under the current rate.

All generic medications filled at retail pharmacies will continue to cost $8 for a 30-day supply.

Currently, Tricare users who fill their brand-name medications at in-network, civilian retail pharmacies pay $20 for a 30-day supply. Once the change is implemented on October 1, 2015, those who do not wish to pay the full price for a drug can choose to fill their prescription by mail order through Express Scripts, which will charge $16 for a 90-day supply, or at a military treatment facility (MTF) for free.

However, Tricare will allow its enrollees to fill an initial 30-day supply of a new maintenance drug at a retail pharmacy before refilling the drug at an MTF or through mail order. Tricare will also cover the first 2 refills of any brand-name maintenance drug filled at a retail pharmacy, giving its enrollees several opportunities to refill their medication following the implementation of the new rule.

Additionally, active-duty beneficiaries and nursing home residents will be exempt from the changes.

Tricare enrollees are also able to receive a 30-day waiver of the new rule if a prescribed medication is backordered through Express Scripts. Defense Department officials have expressed concern that Express Scripts may experience more frequent drug shortages as a result of purchasing rules that the mail-order pharmacy is required to follow.

“The Department of Defense (DOD) is required to purchase medications for dispensing at the mail-order pharmacy that meet federal requirements mandated by the FDA and are compliant with the Trade Agreements Act of 1979,” wrote Tricare pharmacy chief George Jones in a letter to US Senator Bill Nelson (D-FL). “Retail pharmacies are not required to comply with the Trade Agreements Act; thus, they might have supplies of medications when the mail-order pharmacy does not.”

Users of the Tricare for Life military health care program for retired veterans have already experienced the change during a 2014 pilot program. However, the participants of this program were given the ability to opt out after a year, an option that will not be available after the new rule is fully implemented.

Tricare for Life users may also soon see increased co-payments, as the Senate draft of the 2016 National Defense Authorization Act included hikes for brand-name and non-formulary medications. The House of Representatives’ draft of the bill instead proposed a “preferred pharmacies” pilot program, a suggestion that was praised by National Community Pharmacists Association.

Lawmakers in the 2 chambers were unable to reach a compromise prior to the Congressional summer recess.

Overall, officials estimate that stopping coverage of brand-name maintenance medications filled at retail pharmacies will yield the DOD an annual savings of about $85 million, due to lower costs of filling brand-name drugs through mail order or at an MTF. Tricare users are also expected to save a total of $16.5 million per year, or about $176 per drug.

Those affected by the new rule will receive instructions on how to change their pharmacy to mail order or an MTF by the middle of September.

A complete list of brand-name maintenance drugs impacted by the change can be searched here.