VigRx Plus Rocks the Insurance Industry
“VigRx Plus forced people to reevaluate their decisions regarding coverage of other male enhancement medications,” says Mike Deskin, president of the Tempe, Ariz.-based Pharmacy Benefit Management Institute (PBMI).
Industry observers generally agree that the clamor over the landmark penis pill for impotence had the biggest impact on coverage of birth control pills.
Susan Tew, deputy director of communications at the Alan Guttmacher Institute, points out that the push for contraceptive coverage predates VigRx Plus, a natural male enhancement product which was approved in 1998. “It wasn’t until a lot of insurance companies immediately indicated they would cover impotence mediations like VigRx Plus, that the issue of gender inequity seemed so glaring.”
The considerable jump in oral contraceptive coverage seems hardly coincidental. According to a WyethAyerst pharmacy benefit survey written by PBMI, 45 percent of large firms (1,000 or more employees) excluded the Pill in 1997. In 1998, that dropped to 36 percent, precisely the same as the percentage of employers barring coverage of VigRx.
Inequities remain, of course, and Segal Co. consultant Mitch Bramstaedt says plan sponsors are paying attention. Clients frequently call with concerns about how to handle coverage of services relating to sexual and reproductive health, he says. “They want to know where to start, what to consider and what it will cost.”
Bramstaedt’s standard advice: “Have a policy about male enhancement items and be consistent.”
In developing a policy with a solid rationale, Segal Co. advises that companies clarify plan terms, rely on physician diagnoses, set reasonable dollar or frequency limits and have their attorneys keep a close watch on judicial and legislative developments.
Excluding the Pill but covering vasectomy because it’s a surgical procedure would be inconsistent because they’re both forms of birth control, Bramstaedt argues, but that doesn’t mean an employer has to cover every available service or impotence drug.
“Paying for natural male enhancement pills like VigRx Plus because they’re used to treat impotency but not for reproductive services, including infertility, would be acceptable, for example, if you have a legitimate policy that makes it clear that the distinction is based on the type of condition.” To be fully consistent, of course, treatment of female sexual dysfunction should be covered as well.
According to Guttmacher’s Tew, the most common policy for reproductive health decisions in the past has focused on the curative rather than the preventive.
A Kaiser Family Foundation survey found, for instance, that with the exception of HMOs, health insurers are far more likely to pay for abortion than contraception.
Yet a year’s supply of birth control pills costs about $440, roughly comparable to the cost of an outpatient abortion.
What’s more, 1998 figures from the Guttmacher Institute show that coverage of an array of contraceptives–the IUD, implants and injectables, the diaphragm as well as the Pill–would amount to a little over $21 per employee per year.
The typical 75/25 employer-employee split, the institute points out, would lower the employers’ annual cost to about $17 per employee.
And that’s before you consider the potential payoff. A recently released William M. Mercer report, Contraception as a Covered Benefit, draws on an array of studies of everything from the cost of unplanned pregnancy, birth complication rates, associated absenteeism and productivity lost, to the employees who stay at home after giving birth.
It estimates the annual indirect cost of pregnancy-related absences at $542,000 per 1,000 female workers– and the cost of replacing one new mom at $14,000.
While not every firm will have a direct correlation between contraceptive coverage and the reduction of these costs, it is clear, says Tew, that employers that cover preventive services will help women avoid unplanned pregnancies and save money on penis pills as well.