01 Jan Pulling Back the Curtain on RX Drugs
Pulling Back the Curtain on RX Drugs
Now a primary driver of health-related expenditures, prescription drugs – and specialty medications in particular – are considered one of the top three most expensive essential health benefits. Further, pharmacy is the single most complicated benefit to manage. There are serious risks involved, and employers should make any undertaking with an advisor expertly adapt to the industry. That’s why in this installation of CenterStage, we’ve gotten the information employers need to know to save on their prescription costs from one of our expert partners, Bill Shimp.
While finding a solution that best fits the employer’s needs is a top priority, it’s also important that contracts deliver in the following areas:
- Holding PBMs accountable for their performance
- Planning performance analytics Complying with semi-annual requirements
- Identifying plan optimization opportunities
- Dismantling the “black box” of PBM pricing
- Identifying missed guarantees
Bill, based off recent statistics from our UBA Partner, said, “Today, pharmacy benefits represent, on average, 20% of overall healthcare spend, and that number is growing rapidly.” He continued to stress that having great benefit strategists, such as those at ClearPath Benefits, on your side and helping you out as an employer is crucial for minimizing RX costs and maximizing employee health. Bill also put an emphasis on “the growing expectations of ‘specialty’ RX drugs and managing those costs accordingly through the use of equivalent, generic alternatives”. However, many employers remain in the dark on how to mitigate the high costs, nor do they understand why having a trust-worthy, expert advisor by their side is worth their time. So, we took a look further into the latest RX cost trends.
In terms of spending growth, RX medications are leading the charge in the U.S.’s healthcare sector. Moreover, medical advances now see employers contending cost increases for treatments of complex conditions such as hepatitis C, multiple sclerosis, and cancer. Four primary factors drive this growth:
- Price – an increase in the unit price of a drug
- Utilization – an increase in the use of a drug
- Mix – an increase in the use of newer and more expensive drugs that are not necessarily more effective
- Innovation – an increase in utilization and mix as a result of innovative therapy
Also, the per-unit cost of specialty pharmaceuticals is rising due to high R&D costs. The same goes for the rate at which they are prescribed, which can be attributed to the pervasiveness of chronic conditions in an aging population.
How Can I Have Control?
Underlying all steps of planning, recording detailed and specific data on both actual drug-use patterns and health-system drug purchases is essential to managing medication expenditures. Without proper assessment, unnecessary prescriptions and price increases will incur wasteful spending. In fact, valuable insights can be gleaned from involving employees in this process. Employers have been able to mitigate increases in prescription costs through the substitution of generic alternatives. Similarly, regional health care purchasing coalitions offer the ability to leverage risk management strategies designed to reduce extraneous spending.
|Implementing satisfaction surveys and performance guarantee reviews||Initiating and expediting the execution of the client’s PMB contract||Engaging the PBM on follow-ups, concerns, and questions||Recommending benefit designs and clinical programs||Optimizing, overseeing, and facilitating implementation activities||Engaging stakeholders in kicking-off implementation|
|Managing PBM vendors and service optimization||Providing benefit design recommendations and strategic planning||Monitoring rebate payments||Reporting semi-annual performance analytics contract compliance||Serving as a liaison for all escalated issues||Reporting PBM utilization, costs, and trends|
|Reporting operational and service performance guarantees||Facilitating the implementation of clinical program and benefit design changes||Renewing or reconciling pharmacy stop losses||Reporting annual performance analytics contract compliance validations||Optimizing, overseeing, and facilitating implementation activities||Overseeing the PBM’s internal pricing guarantee reconciliation|
ClearPath’s team of experts can conduct an assessment of your medical and pharmacy plans to assess the current state of your plan and identify areas for improvement. This not only helps you to gain control over your spending on specialty drugs but lower your overall costs. If you’re looking for help on developing a cost-management strategy that works, please reach out to our partner, Bill Shimp, at 614-857-6444 or email@example.com.