Managing the DoD Pharmacy Benefit in the 21st Century

The provision of military medical care across the Department of Defense stands on the cusp of immense change, especially the Pharmacy benefit. Changes in civilian and military policies and procedures, escalation in pharmacy benefit utilization, and increasing medication costs are transforming pharmacy benefit structure and the face of the personnel that provide the pharmacy benefit. Medical breakthroughs are expensive and the DoD, along with the entire US health care system, must astutely manage health care expenditures. This research paper will explore the issues affecting the provision of the DoD pharmacy benefit and attempt to determine the most cost-effective venue for providing this benefit. The primary focus will be the differences between the Military Treatment Facility (MTF) and Tricare Retail Network Pharmacy (TRRx). The Tricare Mail Order Pharmacy (TMOP) is near cost neutral to the MTF, (because the dispensing fee is partially offset by the $3/$9 co-pays) therefore it is excluded from comparisons in this paper. The TMOP's only utility is refilling maintenance medications. It cannot be used to fill acute medication prescriptions like antibiotics. Data from literature sources, the DoD Pharmacoeconomic Center (PEC), and the Pharmacy Data Transaction Service (PDTS) will be used in a retrospective methodology to estimate the most cost-effective venue for providing the DoD pharmacy benefit. This analysis utilizes well-defined, common data points such as medication ingredient costs and number of prescriptions dispensed as well as more nebulous data points like prescription dispensing costs and personnel costs.