The rising cost of prescription drugs is a challenge for most companies. Prescription pricing trends show an increase of 11.3 percent in 2016, followed by 11.6 percent in 2017. When only specialty drugs are considered, those increases rise to 18.9 percent for 2016 and 18.7 percent for 2017. As a result, although these specialty drugs account for less than one percent of all medication purchases, they are projected to make up 50 percent of all prescription drug costs by 2018. That’s a tough pill for any company to take.
Fortunately, companies can use a Prescription Benefit Manager (PBM) to provide a proactive response to this important element of employee benefits. What does a good PBM do?
- Streamline the Rx claims processing between the pharmacy and member
- Negotiate drug pricing with pharmacy
- Create a pharmacy network
- Manage drug formulary (the list of drugs a pharmacy agrees to carry)
- Serve as the intermediary between the pharmacy, drug manufacturer and client
- Provide customer service support
Now, some may say that PBMs play the middleman and have contributed to the rising cost of prescription drugs. That’s because some PBMs are compensated by rebates passed along to them by drugmakers if they choose to favor one drug over other competitors. That’s why at MJ, we recommend our clients partner with PBM’s that are completely open and transparent with their negotiation and pricing process, which is not always the case with all PBMs. We have some impressive success stories where we’ve helped our clients drive down costs by expanding the list of affordable drugs, sourcing generic drugs from multiple suppliers and returning all negotiated rebates back to the client.
In addition, we always advocate for PBMs that continually monitor the prescription market to ensure clients receive the lowest possible price without forfeiting effectiveness. As one example, reviewing what’s known as a “combination drug,” which is when two or more drugs are combined into one pill. For example, a new combination drug, Duexis, costs $2,306 per fill. However, the separate, but equally effective alternative, to Duexis, is individual prescriptions for both Famotidine and Ibuprofin. Do this and the cost drops to only $23.18, or nearly 99 times less than Duexis.
If you’d like to see more detail and how we helped a client see a 60 percent decrease in Rx costs, please download our case study: Specialty Drug Spending is on the Rise. Of course, we’re always eager to answer your questions directly as well, so feel free to call or email too.