The drug pricing alarm has been ringing for years. With prescription spending jumping 76% between 2000 and 2017, Americans are no strangers to the financial strain brought on by rising drug costs. Yet the events of the past two years have caused the alarm to ring louder than ever—and employers who ignore it risk missing out on solutions that could shift pricing power back in their favor, setting the stage for a healthier, more productive workforce.
With specialty drugs accounting for only 2.2% of prescription volume but 36% of pharmacy industry revenue, it seems that big pharma—rather than prioritizing patient health—is more concerned with making “money from sick people”. When the cost of drug therapy climbs too high, consumers report forgoing their medication treatments, despite the obvious risk it poses to their health.
Not only does prohibitive drug pricing contribute to the worsening of our nation’s health, but it also hurts public faith in our healthcare infrastructure. As expensive drug therapies continue to be out of reach for sick Americans, trust in the system deteriorates, causing members to abandon engagement with it altogether. Many consumers, faced with the inherent complexity and opaque nature of current drug pricing practices, abandon their treatment and search for help. The result is a sick population that’s getting sicker, forced to turn to their HR and benefits teams for guidance.
Unfortunately, the pharmaceutical industry is often just as perplexing to HR and benefits leaders as it is to the employees they’re trying to assist. Doing nothing is not an option for employers who need a healthy and productive workforce to safeguard and build their bottom line.
If doing nothing isn’t an option, what options do you have?
The solution lies in pinpointing what has driven us to this breaking point, as well as looking internally to strategize how employers can add more healthcare value for their talent. The recent rise of digital tech-based solutions has spurred the development of more cost-effective pharmacy benefit managers (PBMs) that demystify pricing and encourage member engagement. By using these new consumer-centric pharmacy models, you can finally empower your workforce to operate at their fullest and healthiest potential.
Pinpoint the problem areas that are driving dissatisfaction.
With nearly 50% of U.S. workers receiving healthcare through their employer, companies are well-positioned to serve as health advocates for their employees. But historically, employers haven’t felt as though they had much power when dealing with PBMs. Most traditional PBMs hand them a formulary, and employers accept it as is—not knowing that they can demand more transparency, minimizing surprise drug costs for their members later on.
One of the biggest problem areas in drug pricing is the mystery of it, which has long been accepted as a necessary evil within an already complicated healthcare system. The result is that employers are often just as confused about drug costs as their employees—and can therefore offer little assistance. No less critical, it also presents a challenge for HR and benefits leaders when trying to gauge whether the return on their PBM is worth the investment.
These apparent issues are driving employer dissatisfaction with their PBM arrangements, with research from the National Pharmaceutical Council (NPC) revealing that only one-third of employers rated their PBM as “very trustworthy,” and half of employers feel that PBMs don’t provide transparency into formularies and exclusion lists.
The solution is clear: Drug pricing needs to be more transparent, and employers are uniquely positioned to advocate for that movement. But how do they begin?
To make sure you’re not missing out on a solution for more financial visibility, you’ll have to depart from the status quo. In my experience, while that takes courage, the benefits of having a workplace operating at full health potential are worth it. Examine the current landscape within your own organization and take note of where the gaps are in your own PBM arrangement. From there, you can begin plotting an effective strategy forward.
Seek out innovative, member-centric PBMs.
Employers have the power to ask more from their current PBMs, but they’ll have to be proactive with their strategies. Legacy PBMs are infamously rigid, complicated, and prone to causing inexplicably high pharmacy costs. If an employer’s existing PBM vendor isn’t equipped or willing to provide the level of pricing transparency that lets their members get the most value from their plan, they should look for more modern and consumer-centric alternatives.
When seeking out a new PBM contract, employers should look for transparent pricing models, which allow members to access the care they need—at prices they can understand and afford. Imagine the relief a sick employee must feel knowing that they can treat their health concerns based on what is best for them, and not the number in their bank account. Also imagine how much more productive employees could be at work when they’re not under pressure to choose between taking their medication or paying their bills.
Invest in the solutions that prioritize engagement.
If HR and benefits leaders are to take part in ushering in this new wave of healthcare, they’ll have to consider how they’re going to convince members to engage with a model that they have come to distrust. While skyrocketing drug prices are the most obvious obstacle to accessing health-saving drugs, the dizzying complexity of the healthcare ecosystem has also shaken many people’s faith and discouraged engagement. After all, why suffer the headache of fighting your way through a maze if you know the prize at the end is a price tag you can’t afford?
The solution is a PBM model that uses navigation to direct users through the pharmacy maze—or rather turns the maze into a straightforward path. Pharmacy navigation has emerged as the key component of a tech-driven PBM solution that prioritizes end-user convenience, directing members along the simplest and most cost-effective routes to getting the medication they need to live healthier, happier, and more productive lives.
It’s not always easy to shake free from the status quo. But if employers ignore the sounding alarm and resist change for too long, they risk losing their top talent to the employers who are waking up and taking a stand for a more holistic, employee-centric pharmacy benefits solution.
Learn more about the drug pricing awakening.