Author: Mikal Jeffries, CEBS, Vice President, Senior Benefit Consultant
Prescription claims costs have risen an average of 6.5% per year since 2018, with specialty medications now representing approximately 50% of pharmacy spend. It seems like a runaway train and employers are searching for cost containment options as we head into 2023. Adding to the stress of is the industry overload of "solutions", from speciality drug cost containment to mail order competition and recent start-up wholesale solutions. As an employer, it can be difficult to balance industry trends, employee health care needs and cost optimization.
HORAN's most recent benchmarking chapter takes a deep dive into pharmacy trends and solutions resulting in insights and recommendations to help build your pharmacy benefit strategy. Below are some of our findings and considerations.
Stay The Course. There has been a recent wave of new start-up solutions offering whole mail or direct to consumer pharmacy options. From Mark Cuban's Cost Plus Drug Company to Amazon's PillPack program, consumers now have "quick and convenient" digital access to limited preventive and certain chronic condition medications. However, according to the National Community Pharmacists Association (NCPA), eight out of 10 consumers prefer their in-person pharmacy over a mail order option. It appears a barrier to these types of solutions is individuals' desire to talk to a pharmacy specialist in person.
Consider The Alternative: Optimizing generic formulary options and copays so plan members can protect their budget, drive utilization and maintain member access to a "local" pharmacy.
Prioritize Primary Care. Developing a health care strategy with your primary care physician is critical for optimizing preventive care in addition to impacting chronic illness and costly medical claims. HORANalytics® shows providing free preventive medications increase adherence for diabetes and hypertension drugs by 10-15%, reducing overall medical claim costs by 2%. In addition, this strategy impacts other common chronic conditions by removing cost barriers to drive adherence and mitigate costs associated with condition complications.
Consider The Alternative: Support primary care partnerships by offering free preventive medications on your formulary to help maintain medication adherence and promote better plan member health outcomes.
Educate Your Plan Members. We are constantly bombarded with advertisements from drug manufacturers about the benefits of high-cost speciality medications while other solutions promote low-cost generics. It can be overwhelming to consumers. This results in frustration, confusion and often creates more questions than answers.
Employers can help plan members navigate this maze by designing an effective pharmacy benefit that includes a cost-effective formulary (drug list), best-in-class utilization management program and strong customer service to support member education and clarity. These factors allow for informed decision making and cost containment opportunities.
Consider The Alternative: Executing a Pharmacy Benefit Manager (PBM) market bid to strengthen and improve current contract language, improve support resources and identify new opportunities.
Pharmacy trends are changing regularly, and our team of HORAN certified pharmacy benefit consultants continue to monitor the landscape and build strategies that maximize employee health and optimize cost containment options.
To read the full benchmarking study, click here and contact your HORAN representative to discuss the options available to you.
