How can a PBM reduce a self-funded employer’s exposure to prescription drug claims without increasing deductibles and copays or limiting access?

The percentage of total claims incurred for prescription drugs in self-funded healthcare plans can vary, but on average, it tends to be around 20-25%. This percentage can fluctuate based on the specific demographics and utilization patterns of the covered population.

These figures are average estimates, and specific percentages can be influenced by a wide range of factors, including plan design, employee health profiles, and specific high-cost drug treatments.

How can a pharmacy benefit manager reduce a self-funded employer’s exposure to prescription drug claims without increasing deductibles and copays or limiting formularies?

1.     Optimized Drug Utilization Management:

   PBMs can implement advanced drug utilization review (DUR) programs to ensure that medications are used appropriately and effectively. This involves real-time monitoring to detect overuse, underuse, or misuse of medications, which can improve patient outcomes and reduce overall costs.

2.     Increasing Use of Generic Medications:

   By promoting the use of generics and biosimilars over brand-name drugs, PBMs can significantly reduce costs. They can achieve this through educational initiatives for both prescribers and patients and ensuring generics are readily available.  

3.      Negotiating Manufacturer Rebates:

   PBMs can leverage their purchasing power to negotiate substantial rebates with drug manufacturers. These rebates can be passed directly to the employer, lowering the net cost of prescription drugs.

4.     Specialty Drug Management:

   Specialty drugs often account for a significant portion of prescription drug spending. PBMs can implement specialty pharmacy programs that provide tailored management and distribution of these drugs, ensuring appropriate use and adherence, which can lead to better health outcomes and cost savings.   

5.     Clinical Programs and Adherence Programs:

   Implementing clinical programs such as medication therapy management (MTM) and patient adherence programs can help ensure that patients follow their prescribed treatment regimens, reducing hospitalizations and other healthcare costs associated with non-adherence.

6.     Pharmacy Network Optimization:

   PBMs can create narrow or preferred pharmacy networks that offer lower pricing and superior service standards. By directing patients to these pharmacies, PBMs can negotiate better pricing and ensure high-quality care. 

7.     Advanced Data Analytics:

   Utilizing data analytics to identify trends and opportunities for cost savings can help PBMs make informed decisions. Analytics can uncover patterns in prescribing and dispensing that may signal inefficiencies or opportunities for cost-saving interventions.

These strategies enable PBMs to proactively manage prescription drug costs without negatively impacting deductibles, copays, or the availability of medications, thereby protecting the financial health of self-funded employers and ensuring comprehensive care for employees.

 If you think your PBM could be doing more to reduce your healthcare plan’s Rx exposure, contact Kyle Johnson at ClearScript for a free assessment of your needs: kyle.d.johnson@fairview.org

Sources:

Segal Health Plan Cost Trend Survey (2021)**: This survey highlighted that prescription drugs can account for about 20-25% of total healthcare claim costs in employer-sponsored health plans.

Pharmacy Benefit Management Institute (PBMI) Report (2022)**: According to PBMI, the trend has been relatively stable with prescription drugs constituting approximately 22-24% of healthcare claim costs for self-funded plans.

Kaiser Family Foundation (KFF) Employer Health Benefits Survey (2022)**: The KFF report indicated that prescription drugs make up a significant portion of healthcare claims, usually around 23% for large employers with self-funded plans.

“Pharmacy Benefit Managers and Their Role in Drug Cost Management,” American Health Policy Institute, 2020.

“Cost Savings Achieved Through the Use of Generic Pharmaceuticals,” Association for Accessible Medicines, 2021.

“The Economics of Pharmaceutical Rebates,” Congressional Budget Office, 2022.

“Managing Specialty Drug Costs,” National Business Group on Health, 2020.

“The Impact of Medication Adherence on Health Outcomes and Total Health Care Costs,” CVS Health, 2021.

“The Benefits and Risks of Narrow Pharmacy Networks,” Health Affairs, 2019.

“The Role of Data Analytics in Pharmacy Benefit Management,” Journal of Managed Care & Specialty Pharmacy, 2020.