The Cost of Rising Prescription Prices

The push to address the soaring costs of prescription drugs continues to define American health care in the twenty-first century. Now more than ever, employers are challenged with easing the financial burden that prescription prices place on their employees and their budgets.

Recent trends show that one segment of pharmaceutical spending is outpacing the rest at a considerable rate. Specialty drugs are the fastest growing area of overall pharmacy spending, and typically cost 50 times more than traditional drugs. Reports indicate that specialty drugs now represent 50% of the total drug spend, and predict net costs will reach $402 billion by 2020.

In an effort to control spending, the 2018 pharmacy benefits landscape was dominated by the consolidation between multiple pharmacy benefit managers (PBMs) and health plans. Some of the biggest names in the health care industry now control health insurance and pharmacy benefits for more than 125 million Americans across Medicare, Medicaid, and employer-based insurance.

Throughout the past two years:

• UnitedHealth Group has combined UnitedHealthcare with OptumRX.
• CVS acquired Aetna to combine with its current PBM, Caremark.
• Cigna is now the owner of Express Scripts.
• Anthem moved millions of people into their new PBM IngenioRx.
• Humana created its own PBM making it the fourth largest PBM by prescription volume.
• Amazon, JPMorgan Chase, and Berkshire Hathaway started their health care venture, Haven, with the intention to improve access to primary care, simplify insurance, and make prescription drugs more affordable.

At NFP, we’ve seen clients with unmanaged employer pharmacy costs of up to twice as much as managed plans. We’re offering another way to help control costs through our Rx Solutions platform.

RX Solutions’ Coalition and Consulting services each provide savings of over 20% to self-insured employers managed by NFP brokers. Alongside Rx Solutions’ clinical programs, we see NFP clients saving an additional 10% over their existing solutions.

NFP’s transitioned our own prescription benefit to the Rx Solutions Express Scripts Coalition contract and implemented their clinical solutions. Since doing so, we’ve saved over $3.2 million — more than 32% of our prescription budget — while giving our employees and their families access to the prescriptions they need at lower out-of-pocket costs.

As prescription drug costs continue to trend higher, Rx Solutions is an opportunity to provide our clients with meaningful savings and peace of mind knowing that their pharmacy management is in good hands.

For more information on rising prescription costs and how you can help keep costs low, see NFP’s trend report, 2019 Benefits Insights.

Link to published content: https://industryinsights.nfp.com/november-2019