Despite their prevalence and usefulness, there are major issues that both employers and consumers face when dealing with prescriptions drugs, including cost.
“Pharmacy benefits are clearly one of the most important parts of an overall health benefits strategy,” says Bill Berenson, vice president of sales and service for Aetna’s Small & Middle Market Business in the North Central Region. “This is an aspect of health care that affects the majority of employees — their personal health as well as their finances — and also accounts for a large share of health care costs for employers.”
Smart Business spoke with Berenson, who described several ways that employers could reduce their overall pharmacy costs and also pass some of these savings onto their employees.
What are some simple ways for a company to reduce pharmacy costs?
One of the most common methods employers use to reduce pharmacy expenses is to adopt a tiered formulary for prescriptions in their plan. With this approach, employees pay less for their prescriptions when they select a generic drug.
If they prefer name brands, they save money by choosing from a list of approved formulary prescription products. The employee pays the most for brand-name drugs that are not on the formulary list.
What is the most effective way for employees to receive their prescription drugs?
Many employers overlook a very powerful tool in managing their pharmacy costs: a mail-order program. For self-funded plans and many insured plans, these programs often allow employees to buy larger quantities of certain drugs for chronic conditions through the mail with a lower relative co-payment.
The mail-order provider is able to buy discounted medications in bulk from manufacturers and pass these savings on to employees. Employers see savings through reduced overall pharmacy claim costs. In addition, many insurers are now offering their own mail-order programs, which make adding this option simpler and more efficient.
Are there any aspects of ‘consumer-directed’ health plans that can help with pharmacy costs?
In response to rising drug costs, many employers are adopting aspects of consumerism in their pharmacy plans. These features are designed to preserve employee choice while providing information and incentives to reduce unnecessary costs. This includes plans that are compatible with health savings accounts (HSAs), which can help members defray some pharmacy costs through tax savings.
What are ‘specialty’ drugs?
Specialty drugs — treatments for such conditions as cancer, hemophilia, hepatitis, immune deficiency, infertility, multiple sclerosis and pulmonary diseases — are a very costly and growing subsegment of many employers’ pharmacy expenses. These drugs often are injected and require special handling and administration.
Are there ways to lessen the financial impact of these types of drugs?
One way health plans are helping to reduce the cost is by offering specialty pharmacy services that provide these drugs less expensively through advantageous vendor contracts.
In addition, some specialty pharmacy service providers may offer around-the-clock counseling operations — staffed by care coordinators, pharmacists and registered nurses — to support employees with disease-specific treatment programs. This kind of responsive service could help improve the employee’s overall health and, as a result, reduce unnecessary claim expenses for the employer.
By implementing some of these different approaches — as well as offering plan designs that provide useful information and incentives to employees for making cost-effective decisions — employers can reduce their costs associated with pharmacy benefits and prescription drugs, while at the same time helping to maintain the health and productivity of their work force.
BILL BERENSON is vice president of sales and service for Aetna’s Small & Middle Market Business in the North Central Region. Reach him at (312) 928-3323 or firstname.lastname@example.org.