What is Lowest Cost Alternative Pricing?

If your plan includes Lowest Cost Alternative pricing, it means your plan has adopted a cost-effective approach that encourages the use of equally effective drugs that are more affordable. In this approach, if a brand name drug is dispensed, it will be reimbursed at the cost of the lowest cost generic equivalent.

This saves your plan money, helping to keep it affordable into the future.

How it works

Pacific Blue Cross has developed a list of medications where brand patents have expired and equivalent generic versions of the same drug are available. Based on available pricing data, we set a benchmark price for each drug that is eligible under your plan.

If your doctor prescribes you a brand name drug and there is a generic version available, your plan will only pay up to the cost of the generic product. Generic drugs are almost always less expensive than the brand name drugs but are just as effective.

Reference Drug Pricing also applies

Our value based pricing approach also follows BC PharmaCare’s Reference Drug Program (RDP) which selects the most cost-effective drug treatment within a therapeutic class and designates it as the “reference drug” In this case, if a doctor prescribes a drug for you and it is more expensive than the reference drug, then the plan will only reimburse you up to the price of the reference drug.

There are eight classes where reference pricing is applied. Within these classes, there are about 50 drugs (including all of their strengths and combinations that are included in the program.

The therapeutic classes of drugs are:

• Histamine 2 receptor blockers (for acid suppression)
• Non-steroidal anti-inflammatory drugs (for pain or inflammation)
• Nitrates (for heart conditions)
• Angiotensin converting enzyme inhibitors (for blood pressure/heart conditions)
• Dihydropyridine calcium channel blockers (for blood pressure/heart conditions)
• Proton pump inhibitors (for ulcers/heartburn)
• Angiotensin receiptor blockers (for blood pressure)
• Statins (for high cholesterol)

Other costs that may affect your claim

Even with a plan that covers 100% of eligible costs with no deductible, you as the plan member, might still be out of pocket under the Lowest Cost Alternative approach. Pharmacies are private businesses and there can be considerable variation in what they charge.

For example:

• The pharmacy may charge a drug markup beyond the Pacific Blue Cross benchmark. The excess cost would be paid by you.
• The pharmacy may have chosen to not stock the lowest cost alternative product which is the benchmark. Here the pharmacy may dispense a more costly drug and charge you for it.
• Drug shortages of generic products may result in the pharmacy dispensing the more expensive brand name drug.
• You may be prescribed a drug in one of five therapeutic categories which is more expensive than the one selected as the reference drug.
• Other factors may also affect your out-of-pocket costs. For example, your plan may include coinsurance, dispensing fee limits, deductibles, annual or overall plan limits. If you have coverage provided by another plan, coordination of benefits may also be required.

What you can do to lower your costs

1. Like any shopping experience, know your prices. Research drug prices by asking pharmacists questions about what they charge for the actual medication and for dispensing it.
2. Search for your prescription on our free pharmacy price comparison tool at pharmacycompass.ca
3. Fill your prescriptions at one of our Preferred Pharmacy Network partner locations.
4. Ask your doctor if there is a generic equivalent to any brand name drug you are currently taking, and check your benefits to find out if it’s covered by your plan. Our Preferred Pharmacy Network partners can also give you advice on what generic alternatives might be available.
5. Don't be afraid to ask questions of your doctor or pharmacist. They may be able to help you change or simplify your drug regimen to help you save costs.

Drug plans can be difficult to understand. Learning about the breakdown of drug costs and finding out how to save on health care costs can help you get the most out of your benefit plan