The buzz around the high cost of specialty drugs in the United States has been prominent in the news of late.
CVS’s recent announcement to make prescriptions more affordable is just one example of organizations trying to ease the burden consumers are bearing because of expensive drugs. It’s also important to note that the creation of specialty drugs has shown no inclination of slowing down, as The Pharmacy Benefit Management Institute reports that since 2000, drug approvals have increased upwards of 580%.
With the constant introduction of new specialty drugs to the market, coupled with the fact they make up over 50% of the total drug spend, it’s no wonder why benefits administrators are concerned for the future. While it’ll take time and policy changes to make a long-term impact, employers can make moves now to ease the financial stress costly pharmaceuticals pose for themselves and their employees.
With open enrollment top of mind for employers and employees alike, it’s important to consider all benefits options available. That includes benefits packages and programs that not only mitigate high prices, but also provide resources to educate employees on managing their conditions to offset costs. These programs also need to address preventive care measures to support employees now instead of relying on specialty drug prescriptions later.
But, if you don’t have a holistic total well-being program that’s effective and currently in place, where do you start? This year’s open enrollment data will give you the resources you need to build one.
Using Data to Identify Cost-Saving Opportunities
One of an employer’s main objectives in a self-funded plan arrangement is to lower overall health-care spend. The first step to reach this goal is to prevent the ripple effect of high claims — preventing higher costs down the road by proactively addressing health concerns when they first arise. Employers must identify the chronic conditions present in their employee base. How? Make smart use of your open enrollment (OE) data and health-care claims analysis. Right after the OE period closes, human resources departments are tasked with pulling benefits enrollment data and digging through trends for a clear understanding of how their workforce utilizes their health-care options and other benefits solutions. This data analysis provides a window into what their employees need and want to better support their total well-being.
Using advanced analytics and data allows administrators to identify the top conditions or risk factors among their employee population; in other words, what conditions are significantly driving up specialty drug prescriptions. This data then helps drive HR leaders’ actions and decisions on what resources to offer throughout the year. This can mean subsidizing drug prices, educating employees on disease management programs and launching new supplemental voluntary solutions. It also empowers benefits administrators to tailor specialty drug-specific communications throughout the year.
What Options Do Employers Have?
Once you know which conditions are most prevalent, you can isolate the drug therapies being used and create employee outreach campaigns to improve compliance and outcomes. Employers can partner with carriers and vendors to maximize the pharmacy touch points that will drive healthy behavior change.
It’s so important that employees understand how actively engaging with their own health will impact their future and, in turn, their future health-care costs. Imagine an employee who isn’t compliant with taking their diabetes medication. Their actions can cause end-stage renal disease, which can cost over $200,000 per claim each year. Proactively promoting compliance and offering resources for employees to live a healthy lifestyle will positively impact an employee’s overall well-being and, therefore, reduce the likelihood of needing specialty drugs.
Of course, not every disease or illness can be cured with compliance and a healthy lifestyle. There will always be instances where prescriptions are a necessity. The high price tag may scare any benefits administrator but restricting drug availability to save money now will only cost you later in higher claims. Instead, require prior approval and pre-authorization for providers. There’s also the step-therapy strategy, where providers prescribe generic drugs first, then, if the desired clinical patient outcome isn’t achieved, they can prescribe specialty (and usually more expensive) medication.
It’s the benefits administrator’s responsibility to offer meaningful benefits that will improve their employees’ total well-being. That doesn’t stop because of the high price of specialty drugs. Don’t panic: There are effective ways to manage the climbing expenses in pharmaceuticals that employees need to live a healthy and happy life.
About the Author
Misty Guinn is the director of benefits and wellness at Benefitfocus.