Your Health Plan Has a Serious Drug Problem.
America has a drug problem that goes well beyond that of narcotics and recreational drug abuse. Unfortunately employers are flipping the bill for this problem more than most realize. Having worked in the Pharma industry before entering benefits and insurance, I saw firsthand the money traded back and forth between Pharmacy Benefit Managers or PBMs, The Pharma Companies as well as the Health Insurers. Mind you a recent study by the Mayo clinic found that 7 out of 10 Americans is currently taking a prescription drug. Who do you think is paying the largest sum of this bill?
PBM’s were created as a matter of convenience. The PBM was meant to be used as a way to process a claim for an administrative fee supposedly from a standpoint of transparency. Over the years PBM’s found ways to increase their “spreads” leading to an increase in profits, often at the expense of employers unbeknownst to them. PBM’s acting as a middle man have found many ways to often times make more money than the manufacturer or the pharmacy.
This game has progressed with a big disconnect between what the perceived cost is to employers and what the actual price is being paid for these drugs. Take it one step further; enter the mail order process which actually is more expensive for the employer while the marketing behind it encourages the employee to take the larger supply at a “reduced” out of pocket copay. Finally, employers have been subdued from exploring these contracts and price hikes further by the promise of rebates passed back to them in the form of large cash sums regarding prescriptions that typically cost the plans more money. There is also a hidden portion of the rebate that never lands in the pocket of those that deserve it most, the employers. Don’t find yourself chasing rebate dollars as you end up overpaying for the prescription to only get a mere fraction of the money back!
As employers have been forced to become more savvy regarding health care spend, many of which are moving to self-funding to try to mitigate costs. There lies another great opportunity to greatly drive down costs. PBM carve outs are a staple of our practice and we encourage employers to partake in the elimination of direct carrier contracting with a PBM in the traditional model. Transparency has become the war cry for many pharmacists throughout the country who early on saw exactly what was going on. Many of whom are leading the charge in building “Transparent” PBM’s for the right reasons while offering Medication Therapy Management (MTM) as an additional service bonus.
In this thorough MTM discovery process and claims analytics audit we have found some very disturbing expenses costing $1,000’s upon $1,000’s in wasted spend. Recently one of the pharmacists we work with found that a plan was combining two very common over the counter drugs into a branded prescribed medication costing the employer’s plan $1500 per month. The over the counter 30 day supply’s cost you ask? $20. That was just one drug!
Can your organization afford to continue overdosing on the façade of the traditional PBM/Health Insurance model or is it time to actively cauterize the wound bleeding your company of thousands?
Justin Leader is Vice President of Business Development with Benefit Design Specialists, Inc. BDS is committed to a two-fold goal; delivering quality, cost-effective employee benefit plans coupled with hassle-free benefits management for our client’s HR departments. Transparent Health, By BDS is a solution that drives down Healthcare costs while giving complete investment transparency.