Five ways to contain prescription costs
Prescription spending remains high, and the cost of medications continues to increase to the point where they are no longer affordable. We are now seeing our first $1 million medication in Luxturna, a gene therapy that treats hereditary blindness, and which has average wholesale price of $1.2 million. That’s $510,000 per eye.
Unfortunately, many tactics used to reduce prescription benefit expenses for plan sponsors merely shift costs to members. This provides little meaningful relief to anyone. A recent study published in the Journal of Oncology showed a significant increase in the rate of prescription abandonment when members were forced to shoulder more of the cost burden. Almost one-third of individuals required to pay between $100 and $500 out of pocket abandoned potentially life-saving drugs at the pharmacy counter.
Health conditions worsen when left untreated. This is simple logic. Plus, they put a greater burden on the healthcare system. Emotional and financial costs rise as members find themselves in need of more aggressive treatment, such as inpatient hospitalization to address the damage done when care is delayed or prescribed medications are skipped or not taken at all.
The status quo has failed to contain prescription costs. It’s time to be creative. Here’s what benefit advisers can do to help clients control the cost of their employees’ medications.
First, focus on health outcomes, instead of the price or rebate per drug, using a pay-for-performance approach. Helping members enjoy the best possible health is not only the right thing to do, but it reduces the necessity for more drastic and expensive interventions later on.
Second, give PBMs access to all available healthcare data for each member to create a whole health picture and improve coordination of care with the prescriber and any specialists. The PBM’s pharmacists can then guide members to the most effective drug therapies at the lowest possible net cost.
Third, ensure your PBM utilizes data mining effectively. Thorough analysis of plan utilization and claims data allows a PBM to tailor clinical programs to the plan sponsor’s specific needs and respond quickly to changing market conditions. PBMs must be prepared to address newly available medications and changes in drug pricing, as well as emerging trends, including early identification of warning signs revealing inappropriate prescribing.
Fourth, implement clinical programs such as step therapy and prior authorization responsibly, and in a manner that benefits members. The ultimate goal should be to safeguard members without restricting access to care. Clinical programs must focus on the most appropriate treatments that offer the greatest value, and not be driven based on the drug’s price tag alone.
And finally, create a culture of learning and pure transparency. Choose a PBM that is responsive, and will help plan sponsors understand factors such as potential member disruption, and the cost versus benefit of each possible solution to healthcare challenges. No two member populations are the same, and every plan sponsor is unique. PBMs should act as partners in the effort to provide better, more affordable healthcare to members.
When plan sponsors, consultants and PBMs work together to understand the plan and implement effective clinical solutions, the end result is improved care and lower overall costs.