Prescription drug prices jumped another 3.8% in the first quarter of 2015, adding to the mounting fears of employers concerned about increasing health care costs. With no slowdown in sight, now is the time for advisers and their employer clients to take action through plan design for 2016, experts say.
Analyzed by category, branded drug prices jumped 5.7%, specialty drugs rose 2.5% and generic drugs increased 1.4% between January and March 2015, according to the Truveris National Drug Index.
The index also points to infertility (12.2%), menopause (8.8%) and hormone deficiency (8.5%) as conditions that saw the highest drug price increases.
Prescription drug prices continue to rise at a rate that makes it increasingly difficult for businesses to keep the costs of employee benefits in check, says Bryan Birch, chairman, president and CEO of Truveris. This necessitates that benefit plan managers act now to reevaluate benefit plan designs for 2016, or contemplate stop-loss insurance to cover this mounting liability. By taking these precautions, plans can confirm they have all options at their disposal to best meet their bottom line objectives and the needs of their employees.
Employers consider their health plan designs, they "are very focused on specialty pharmacy drugs and the potential impact they have" on the company's bottom-line, says Brian Marcotte, president of the National Business Group on Health.
A recent NBGH survey found large employers identified the cost of specialty pharmacy drugs as their second or third highest cost-driver, behind high-cost claims and special conditions.
The trade group says 43% of large employers developed a specialty pharmacy cost management strategy for 2014 and another 18% are planning to do so this year.
The most common management techniques are the same as for traditional medications, including step therapy, prior authorization and quantity limits (including 15 day fills), according to NBGH.
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