Price is the number one driver of plan selection. To contain price, employers will immediately start exploring more balanced options to drive down costs for their employees with guaranteed drug plans.
Several states have introduced proposed ‘protectionism,’ legislation to shelter pharmacies from competition and strengthen negotiation leverage with drug plans, mostly targeted at mail-order drug offerings.
Prescription drug costs between 2014 and 2015 floated up to 13.6%, reported the 2015 Milliman Medical Index Research Report. Today for a family of four a whopping 15.9% of the total healthcare spending is prescription drug cost related-that’s a lot.
This hemorrhaging of pharmacy costs is fueled by increased usage and changes in the types of drugs used. Newer drugs are typically more expensive than older ones and conventional price inflation does play a role. Treatment advances coupled with and aging population continually inches pharmacy costs higher.
Tough questions need to be asked and then answered:
• Why have specialty drugs increased so much over the last 10 years?
• As major drug Patents expire, many drug manufacturers are losing revenue that was previously guaranteed. Is this phenomenon, a simple case of cost transference?
Areas other than pharmacy costs within plan designs will be explored to drive costs down including: telemedicine services, encouraging use of narrow medical networks, education and decision support tools for employers and consumers.
As employers re-contract drug plans, employers can then shift cost savings into better plan designs for employees and begin to shave down required employee contributions.