| Summary: | A contributing factor in the rising costs of the Military Healthcare System (MHS) budget is the pharmacy benefit. In efforts to reduce or contain the costs associated with this benefit, the MHS has implemented several cost saving strategies that were adopted directly from private health care organizations. These strategies include formulary restrictions, generic substitutions, and beneficiary cost sharing that uses a tiered co-payment structure. These strategies are primarily designed to save costs by influencing the behaviors and attitudes of beneficiaries, restricting their access to options with higher costs, and directly shifting a portion of the programs cost through co-payments. This thesis concludes that by implementing these utilization management strategies, the MHS has experienced results that are as good as or better than those experienced by the civilian sector. However, Tricare pharmacy expenditures continue to increase at a faster rate than other components of the MHS demonstrating that the implementation of these strategies, though successful when compared to civilian benchmarks, have not sufficiently contained Tricare pharmacy expenditures. To be successful, the DoD must use a multifaceted approach to contain these escalating expenditures. Ultimately, dramatic cost shifting may be the only way to lower expenditures
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