On-site pharmacies help employers control drug costs

June 6, 2005

Quad/Graphics, West Allis, Wis., one of the largest printing companies in the United States, spent approximately $6,000 per employee on medical costs last year. This is 30% less than that spent by the average employer in the state. Do these stellar stats have anything to do with the fact that the company provides most of this health care itself?

Quad/Graphics, West Allis, Wis., one of the largest printing companies in the United States, spent approximately $6,000 per employee on medical costs last year. This is 30% less than that spent by the average employer in the state. Do these stellar stats have anything to do with the fact that the company provides most of this health care itself?

Quad/Graphics built its first in-house clinic and pharmacy in 1990 "as part of an experiment," said Patrick Ross, R.Ph., pharmacy supervisor for the company. Quad/Med, a wholly owned subsidiary of Quad/Graphics, operates three pharmacies at Quad/Graphics plants in Wisconsin. Quad/Med has been so successful in its efforts that it has started a business operating clinics for other employers seeking to provide corporate health care for their employees. John Neuberger, business manager for Quad/Med, reported that Quad/Med currently manages clinics for four other employers.

Ross said employees find the program very convenient. They can pick up their prescriptions before or after work or on a break, and payroll deductions for co-pays are available. Neuberger said that employees have the option of going to any network pharmacy, although they would pay a higher co-pay of about 10%.

Although Quad/Graphics chose to set up its own clinics, other companies, including Eastman Chemical and Toyota, have turned to an outside service provider to get the job done. CHD Meridian, the on-site division of I-trax, operates facilities for these companies.

"Today's employers are buying our model because we can control drug costs more effectively than can retail chains and mail-order houses," claimed Stuart Clark, the executive VP for Onsite Healthcare Services at I-trax. "We can buy drugs at substantially reduced costs because we serve a defined population-our clients' employees and their dependents," he explained.

Clark said the CHD Meridian model also controls drug utilization. He pointed out that the on-site pharmacists know the population they serve. They remind employees to refill their prescriptions, which encourages compliance, and will make appointments to sit down with employees individually and review their drug regimens, he said.

So-called "brown bag" medication review days encourage communication with prescribers that can impact their prescribing habits, which in turn impacts drug utilization, said Clark. He explained that private consultation rooms are incorporated into the pharmacies' design because such patient counseling is a very important aspect of the CHD Meridian model.

"Our pharmacies are approximately 2,000 square feet in size," Clark said. In addition to dispensing prescription medications, the pharmacies also sell OTCs and disposable medical goods, such as glucometers and blood pressure cuffs.

An on-site pharmacy is not appropriate for every employer, however. A critical mass of employees is necessary in order for such a facility to be successful, said Ross.

Clark concurred, saying, "We like to see approximately 1,000 employees in one location to make an on-site pharmacy work." He added that companies interested in establishing an on-site pharmacy, but for whom it is not practical to do so alone, could work with another employer or group of employers to set up a facility for their employees to share.

The idea of on-site health care must also be consistent with the corporate culture, noted Ross. "We work with our employees to encourage healthy lifestyles and support our clinics," he said.

The location of the pharmacy is another factor that determines its success. Clark said that if family members and retirees use the facility, it should not be located in the middle of the building. In addition, some companies may have employees with a long commute. In such situations, a centrally located pharmacy may be more convenient.