Our country and the entire world has experienced significant disruption lately due to the coronavirus pandemic. Many businesses have shifted to remote work for employees, while others have chosen to close temporarily or been ordered to do so by local governments.
During such challenging times, many companies are carefully reviewing their budgets and looking for places to cut back. With healthcare being a significant cost for employers, it’s naturally a piece of the budget that companies will examine carefully to see if any changes need to be made.
And many will ask themselves the question, “How do we cut costs while still taking care of our employees?”
While many prescription benefit plans are year-long contracts, the contract renewal dates can vary throughout the year. Here are some key things to consider if your contracts are up for renewal soon.
Review and revise step therapy programs
Step therapy programs typically start with a clinically proven, cost-effective drug as a first step for the patient to try. For example, an asthma inhaler that’s been on the market for many years and has proven to be effective while also available in a generic option. If, for some reason, that specific medication isn’t effective for that patient, their doctor can complete paperwork for authorization to move to the next step of the program—a clinically proven but higher-cost drug.
If companies don’t have a step therapy program in place, they could be paying more for prescription benefits than necessary if doctors are prescribing higher-cost drugs, so it’s a good place to start when looking at cost containment.
Identify opportunities for manufacturer’s assistance programs
Many manufacturers offer assistance programs to help patients who need specialty or high-cost medications. Some even offer discount programs for lower-cost medications. In addition, your pharmacy benefits manager may provide services to help patients enroll in these programs, which can save both the employer and employee significant costs over time.
Adjust formulary tiers
When your prescription plan is up for renewal, it’s a good idea to review your formulary, which specifies what drugs are covered at each copay level. Based on the prescription use among your employees, you may want to make some adjustments to your formulary tiers to either reduce costs for your employees or help control your costs. The actual cost of each drug factors into the tier placement, but you as the employer should still have some say in what drugs are covered at what tier.
A global pandemic has a far-reaching impact on businesses and our economy as a whole, and we know many businesses are watching carefully and trying to assess the full impact. If we can help as you evaluate your prescription benefit plans among total healthcare costs, please let us know.