Is there a right way to manage drug spend? Actually, yes. But employers use different strategies to give employees access to the medicines they need while keeping costs manageable. Do they dig deep for every opportunity to save? Or do they play it safe by simply following the market? Here’s a look at how two similar employers managed their pharmacy spend over a nine-year period.
2005 – 2010: The generic years
In 2005, major brand drugs like Zithromax, Zoloft, Topamax and Paxil went off patent.
Employer A took the expected path with a pharmacy benefit design that pushed the generic versions of those drugs. And it got the expected results — a low drug trend.
Employer B went a different route. B also offered the generic versions of the off-patent drugs. But it added step therapy so more plan members would start with less expensive generic fills before moving to higher-cost brand drugs.
Adding more options led to a lower drug spend for Company B — specifically, $4.4 million lower than Employer A.
2011 – 2015: More generics, more savings
During this time, even more popular brand-name drugs went off patent — including Effexor, Singulair, Concerta and Lotrel.
Employer A continued pushing the generic versions — to a fill rate of 80 percent. And its savings continued.
Employer B did the same, but had more savings from the greater number of generic drugs filled over the past 10 years. In addition, Employer B used another savings opportunity. B added generic exclusions to offset the higher cost of the first generic drugs on the market following a brand drug coming off patent. And its drug spend was now cumulatively $13.2 million lower than A.
2014: Hepatitis C sticker shock
New drugs to cure hepatitis C hit the market in 2014, and they came with a huge price tag. A single course of treatment for curative drugs like Sovaldi, Harvoni and Viekira Pak often exceeded $100,000.
Employer B encouraged the use of care management programs that give employees individualized support for improved adherence. Read Prime Therapeutics’ (Prime) case study on hepatitis C care management.
Employer B went even further — it added a 5-tier benefit design with 2-tier generics to offset the rising costs of generic drugs.
2015 – 2020: Being proactive pays off
Looking ahead, the specialty drug pipeline continues to offer important treatment advances, particularly in autoimmune and oral oncology. If Employer B uses preferred drugs and biosimilar alternatives to lower its drug spend, by 2020, that strategy will bring the cumulative drug spend difference between A and B to $33.9 million. Not bad, for nine years’ work.
Prime is on the same page
Prime and your Blue Cross Plan offer all the programs used by Employer B — utilization management, preferred drug management, care management — and more.
Our integration helps. It’s how we can offer solutions across pharmacy and medical that give employers greater savings — while helping your employees get the medicine they need.
Balancing employer and employee needs — yes, it’s possible
The message of this story is clear. You can help employees get the right drugs without sacrificing savings. We can show you the right opportunities.
Contact your health plan representative to learn about promoting strategies like these..
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1 2016 Prime internal analysis