Prescription Drugs in the Workplace : Health: The facility at Rockwell’s Defense Electronics unit in Anaheim is designed to hold down medical insurance costs for the employer and prescription costs for the employee.
At an Anaheim facility where guidance systems are made for the MX missile, Rockwell International Corp. has launched an innovative effort to contain its employee health benefit costs--a workplace pharmacy.
Opened 10 days ago at Rockwell’s Defense Electronics unit, the facility is designed to keep in check the rising cost of insuring employee medical care and the growing cost of purchasing drugs.
“We feel we can save approximately 50% on every prescription by running our own in-house pharmacy,” said Pat Sweeney, Defense Electronics’ vice president of human resources and administration.
He said the savings will translate into lower insurance premium costs--$15 to $16 per employee a month--for Rockwell, partly by doing away with the need to pay for the administration of insurance claims.
Rockwell employees also are expected to benefit financially, since deductibles and co-payments required for drug purchases under other health benefit plans will be eliminated. Instead, the employee who goes to the company pharmacy to fill a prescription pays a fee of $3 for generic drugs and $5 for brand-name pharmaceuticals.
Only a handful of companies in the nation have opened their own pharmacies. Southern California Edison may be the only other to have done so in Southern California, where it has been maintaining such drug stores at its Rosemead headquarters and at satellite centers for 15 years.
Jacques Sokoloff, vice president of health care for Southern California Edison, said the utility’s eight pharmacies serve 60,000 Edison employees, retirees and dependents. Edison orders the drugs in bulk at an average of 40% below prices offered by the area’s discount stores. He said the company saves about $4 million a year on pharmaceutical expenses.
More large employers are beginning to search for ways to control drug costs, said Judith Shinogle, an associate director of the American Pharmaceutical Assn., a national professional society of pharmacists based in Washington.
She said in the past three years many companies have tried to cut costs by using mail-order pharmacy services but have gotten complaints from employees who miss the personal attention of a pharmacist.
Sweeney said Rockwell already has tried out the concept of buying its own drugs in bulk and dispensing them through its own facility and its own pharmacists with great success at large plants in Dallas and Cedar Rapids, Iowa.
If the arrangement works well for Rockwell’s 7,000 employees in Anaheim and their dependents, he said the program will be extended to the corporation’s other Southern California business units in Newport Beach, Seal Beach, Downey, El Segundo and Canoga Park, which employ about 18,000 more workers. There is also a plan that will allow Rockwell’s retirees to use the company pharmacies.
One of the concerns about establishing a corporate pharmacy in Southern California, Sweeney acknowledged, is that employees tend to live a distance from where they work, making it less convenient to buy drugs at their workplace. Employees at the Anaheim facility “live all over,” he said, with about a third living in the Riverside-Corona area, a third in south Orange County and a third within five miles of the plant.
As a concession, he said, the company has agreed to reimburse 60% of the cost of prescription drugs purchased at other pharmacies, thus giving employees an alternative in emergencies.
But Rockwell employees in Anaheim are expected to buy most of their drugs at the 3,000-square-foot pharmacy building, which has been constructed next to the employee recreation center.
The company is offering a walk-in service that so far is enabling employees to have their prescriptions filled within 10 minutes, said Robert Kent, the center’s manager and chief pharmacist. The pharmacy is open every day.
Employees also may leave prescriptions at one of six “drop boxes” stationed in various buildings on the sprawling Rockwell campus and pick it up later.
Kent said the company pharmacists will make a special effort to give employees counseling about the prescriptions they order, such as how various drugs may interact, partly because of the company’s self-interest in having healthy employees.
“The response has been tremendous,” Sweeney said. He said the company pharmacy is filling about 200 prescriptions a day, a number that is expected to double after Jan. 1, when Rockwell’s Anaheim employees will no longer have the option to use other drug insurance plans.
Sweeney said the company pharmacy is only the latest of Rockwell’s many efforts to halt rising medical insurance costs. Among them are the use of health maintenance organizations, the establishment of a preferred provider organization, a requirement for “second medical opinions,” and a large variety of health education and exercise programs for employees, who have access to a swimming pool, tennis courts and other recreation facilities at the plant.
Controlling pharmacy costs is especially important, he said, because while all health insurance costs have been escalating at a rate of about 16% to 18% a year, drug costs have risen annually by about 22%, partly because of development costs associated with an explosion of new pharmaceutical products.
He said he expects drugs to become an even bigger cost factor as the nation’s working and retirement population ages, since older people tend to be the largest drug users. “We are trying to posture ourselves to manage that growth,” he said.
