Double-Digit Drug Costs Vex Employers

By Rita Pyrillis

Oct. 19, 2015

Specialty drugs that treat conditions like multiple sclerosis and cancer continue to push pharmacy drug costs skyward with percentage increases in the double digits, according to a recent Aon survey. That is pushing employers to find new approaches to managing prescription drug costs, the survey adds.
Pharmacy cost trends are expected to rise 10 percent in 2015 up from 6.3 percent in the previous year, according to the survey of 60 health care vendors. Specialty medications are expected to jump by almost 23 percent in 2015, up from about an 18 percent increase in 2014.
While the vast majority of employers rely on plan design changes to manage prescription drug costs, like adjusting copays and coinsurance, many are looking at new and innovative approaches, according to a June survey by the Midwest Business Group on Health.
One such approach is narrow pharmacy networks that provide consumers with lower prices when they use selected pharmacies, much like narrow health networks where individuals pay lower premiums when they use in-network providers.
This approach is proving successful in improving adherence to medication and lowering costs, according to a recent study by the CVS Health Research Institute.
“There are few opportunities in health care when we can improve both quality of care and health outcomes while helping to manage health care costs,” said Dr. William Shrank, chief scientific officer of CVS Health and co-author of the study, which was published in September in the journal JAMA Internal Medicine. “This first-of-its-kind study suggests that narrow networks may be one such opportunity by providing clear evidence that these networks — already an established cost management strategy — also help optimize members’ adherence.”
Researchers analyzed CVS Health pharmacy benefit manager data for more than 200,000 patients taking medication to treat a variety of chronic conditions for a 12-month period. Nearly 68,000 patients were enrolled in narrow pharmacy network plans, while 150,000 were not. Researchers compared data before and after implementing a narrow network plan and found that those in a narrow network saw greater improvement in their medication adherence.
Rita Pyrillis is a writer based in the Chicago area.

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