RxBenefits published an article in the April edition of CalBroker Magazine that discussed how employers are facing unprecedented pharmacy benefits costs and presented strategies to help employers avoid common contracting pitfalls and save money. Check out this excerpt from the magazine and click the images and links below to read the full article:
Are Your Clients in Jeopardy?
Uncovering the Mysteries of Pharmacy Benefit Plans
Ever feel like Bill Murray’s character in Groundhog Day? You sit down with your morning coffee and open your daily news feed to see yet another article or comment about Big Pharma, prescription drug prices, the latest medication to hit the market, healthcare mergers and acquisitions. The scene repeats itself every day in what feels like an endless cycle of the pharmacy benefits affordability struggle and the drug pricing blame game.
Meanwhile, your clients are emailing and calling you looking for guidance and innovative solutions to their spending concerns. Fortunately, as Bill Murray’s character figured out, you too can re-evaluate your options and help your clients optimize their current benefit program to a more affordable trajectory.
What You Need to Know About Pharmacy Spending
The issue of pharmacy benefit affordability has never been hotter, with recent reports projecting that pharmacy spend will grow 6.1% year-over-year for the next seven years. In fact, pharmacy costs as a percentage of overall healthcare spend already have increased 40%. And more people are utilizing their pharmacy benefit, leading to more than $0.21 cents of every healthcare dollar being spent on prescription medications.
Changes in drug mix coupled with high brand and specialty drug prices have led us to this point. Generic utilization is nearly maxed out, and specialty drugs now account for more than 45% of total costs while representing just 1% of overall prescription claims. The reality is that we have reached the point where one prescription claim has the potential to financially devastate your clients, if pharmacy is not managed appropriately.
What PBMs Don’t Want You to Know
More than 80% of the pharmacy market is controlled by the three largest Pharmacy Benefit Managers (PBMs): CVS Caremark, Express Scripts, and OptumRx. Yet access to essential PBM services continues to be allocated based on your clients’ size. Self-funding is the only way you can take control and significantly impact pharmacy costs for your clients.
In the self-funding model, your clients can have the pharmacy benefits either carved-in (pharmacy benefits bundled with the medical carrier) or carved-out (pharmacy benefits contracted separately from the self-funded medical plan). Either way, oversight for prescription drug spending is not usually the PBM’s priority unless your client is a Fortune 100 company. It’s your responsibility to fill that gap and help optimize your clients’ pharmacy benefit performance.
Click the images below to continue reading the full article to see the top five contracting risk areas and how you can help your clients avoid them.