Healthcare as an industry involves lots of data, and that’s certainly true when it comes to prescription benefits plans. For self-insured companies, it’s important to understand both the data available from your pharmacy benefits manager (PBM) and how it can help you make future decisions.
Whether you’re coming up on a renewal or simply wanting a status check of your pharmacy benefits plan, it’s important to understand your current pharmacy usage and cost data. Unfortunately, there are PBMs who don’t proactively share that data with their clients — and some who resist sharing it even when clients ask.
At MaxCare, we always share usage and cost data with clients. We’re a strategic partner for our clients, and we help them understand the data and make informed decisions about their plan that can reduce their overall costs while still taking care of employees.
If you’re evaluating your current prescription benefits plan, here are some key questions to ask about your data.
How many generic prescriptions were filled? How many non-generic prescriptions?
Generic medications cost less for the plan and for the employee, and they’re clinically proven to be as effective as the non-generic medication. Often, generic medications account for about 80-90% of total usage but only 15% of overall costs for the plan. Non-generic (brand name) prescriptions typically account for the remaining 10-20% of usage while specialty medications account for 1-2% of total usage.
The way your pharmacy plan is structured can help encourage employees to choose generic prescriptions over higher-cost alternatives, and some plans may even require that they start with a generic version and then submit a prior authorization to move to a higher-cost drug. Knowing how many generic and non-generic prescriptions were filled in the plan year is helpful in analyzing your current formulary and making adjustments.
What percentage of overall utilization and spend is specialty medications?
Specialty medications can be extremely costly for your pharmacy benefits plan. Though specialty medications are typically only 1-2% of total usage, they can represent as much as 50% or more of the overall spend. Specialty is something you want to keep an eye on and ask plenty of questions about.
How is your PBM managing your specialty cost? Do they require an exclusive specialty arrangement where you’re required to purchase from their specialty pharmacy? Or do they allow alternate sources to fill high-cost medications? What programs do they offer that can help you offset the cost of specialty medications?
Does current plan year spending align with the projections?
At any point in the year, your PBM should be able to provide reports of estimated spend compared to actual spend based on usage data. If actual spend is trending higher or lower than anticipated, what’s causing it? This could be anything from employee turnover causing actual spend to drop to a cancer diagnosis for an employee causing a significant increase in specialty medication spend. The important thing is to monitor how things are going and understand what’s causing the changes so you can adjust accordingly in the next plan year.
Did you pay for any combination drugs that have a high cost but low clinical value?
Combination drugs often come at a much higher price than if the individual components are purchased separately. And, in most cases, the combination drug hasn’t been proven to work any more effectively than the individual medications. Yet new combination drugs hit the market regularly and can quickly increase your plan spend. Ask your PBM how many combination drugs your plan paid for and what options they have to identify those drugs in advance and recommend lower cost but still clinically effective alternatives.
If you are looking for a PBM partner who will not only share usage and cost data with you, but also help you fully understand it and leverage it to make plan decisions, contact the MaxCare team for more information.