In late Fall, the President signed two bills that should make it easier for pharmacists to help customers find the lowest cost, appropriate medications. The “Know the Lowest Price Act of 2018” and “Patient Right to Know Drug Prices Act” bills are designed to crack down on “gag clauses” that prevent pharmacists from telling patients about more affordable options for prescription drugs. Having developed a “drug pricing blueprint” to promote greater price transparency, the President praised these bills as representing significant steps in that direction.
National Prescription Drug Take-Back Day will take place on Saturday, April 28th, from 10 a.m. to 2 p.m. and is a great opportunity for those who missed the previous events, or who have subsequently accumulated unwanted, unused prescription drugs, especially medications including opioids such as codeine, hydrocodone, oxycodone, morphine or fentanyl, to safely dispose of those medications.
Since the first Take-Back day in 2010, over 9 million pounds of unwanted or expired medications have been surrendered for safe and proper disposal at over 9,000 sites. Click here to find a collection site near you.
This article appeared on Kaiser Family Foundation on September 19, 2017.
Employer-sponsored insurance covers over half of the nonelderly population; approximately 151 million non-elderly people in total.1 To provide current information about employer-sponsored health benefits, the Kaiser Family Foundation (Kaiser) and the Health Research & Educational Trust (HRET) conduct an annual survey of private and nonfederal public employers with three or more workers. This is the nineteenth Kaiser/HRET survey and reflects employer-sponsored health benefits in 2017.
HEALTH INSURANCE PREMIUMS AND WORKER CONTRIBUTIONS
In 2017, the average annual premiums for employer-sponsored health insurance are $6,690 for single coverage and $18,764 for family coverage [Figure A]. The average single premium increased 4% and the average family premium increased 3% in 2017. Workers’ wages increased 2.3% and inflation increased 2.2% over the last year.2 The average premium for family coverage is lower for covered workers in small firms (3-199 workers) than for workers in large firms (200 or more workers) ($17,615 vs. $19,235).
Premiums for family coverage have increased 19% since 2012 and 55% since 2007. Average premiums for high-deductible health plans with a savings option (HDHP/SOs) are considerably lower than the overall average for all plan types for both single and family coverage, at $6,024 and $17,581, respectively [Figure A]. These premiums do not include any firm contributions to workers’ health savings accounts or health reimbursement arrangements.
Premiums vary significantly around the averages for both single and family coverage, reflecting differences in health care costs and compensation decisions across regions and industries. Seventeen percent of covered workers are in plans with an annual total premium for family coverage of at least $22,517 (120% or more of the average family premium), and 21% of covered workers are in plans where the family premium is less than $15,011 (less than 80% of the average family premium).
Most covered workers make a contribution toward the cost of the premium for their coverage. On average, covered workers contribute 18% of the premium for single coverage and 31% of the premium for family coverage. Workers in small firms contribute a higher average percentage of the premium for family coverage than workers in large firms (39% vs. 28%).
Covered workers in firms with a relatively high percentage of lower-wage workers (at least 35% of workers earn $24,000 a year or less) contribute higher percentages of the premium for single (23%) and family (37%) coverage than workers in firms with a smaller share of lower-wage workers (18% and 31%, respectively).3
As with total premiums, the share of the premium contributed by workers varies considerably. For single coverage, 14% of covered workers are in plans that do not require them to make a contribution, 60% are in plans that require a contribution of 25% or less of the total premium, and 2% are in plans that require a contribution of more than half of the premium. For family coverage, 3% of covered workers are in plans that do not require them to make a contribution, 44% are in a plan that requires a contribution of 25% or less of the total premium, and 16% are in plans that require more than half of the premium. Covered workers in small firms are more likely than covered workers in large firms to be in a plan that requires the worker to contribute more than 50% of the total family premium (36% vs. 8%).
Because of their focus on substance abuse issues and the national awareness of the opioid epidemic, Magellan Rx Management is calling your attention to the Drug Enforcement Administration’s (DEA) scheduled event – National Prescription Drug Take-Back Day. This event will take place on Saturday, October 28th, from 10 a.m. to 2 p.m. and is a great opportunity for those who missed the previous events, or who have subsequently accumulated unwanted, unused prescription drugs, especially medications including opioids such as codeine, hydrocodone, oxycodone, morphine or fentanyl, to safely dispose of those medications.
Since the first Take-Back day in 2010, over 4,000 tons of unwanted or expired medications have been surrendered for safe and proper disposal at over 9,000 sites. Click here to find a collection site near you.
In an environment where cost containment and quality care are constantly challenged, Magellan Rx Management is the smart solution.
The article below was published on May 11, 2017 by the Mercer Signal, written by David Dross.
With all the uncertainties around healthcare legislation swirling, cost control of pharmacy spend remains top priority for employers. On one hand, employers obviously want their employees to have access to the medications they need: drugs like insulin, blood pressure treatments, and cholesterol blockers have long played a critical role in employees’ health. But now new specialty biotech drugs – some of them true medical breakthroughs – are flooding into the market, at costs much higher than previous therapies. Drug prices spiked by 9.8% between May 2015 and May 2016, and there are more sharp increases ahead. Drug costs are quickly becoming unsustainable, for both employers and, increasingly, plan members. Many high-cost brand name drugs may have rebates to reduce their net cost, but the member or patient typically does not see these rebates so their out-of-pocket cost is still high. And even the cost of some generic drugs has risen dramatically.
Fingers are being pointed everywhere—from regulations and research to the cost of lawsuits when new drugs perform poorly. While other stakeholders work on those issues, there are actions employers can take to shift the equation in their favor. Here are a few ideas:
Analyze the data on prescription drug spend in your plan
Prescription drugs are the top driver of health benefit cost increases today. In a recent report by the Pharmacy Benefit Management Institute, pharmacy benefit costs increased 10.2%, driven by 19.2% growth in specialty pharmaceuticals.
It’s important to know what’s driving cost growth in your program. When looking at your data, here are a few things to focus on:
- Drugs – What drugs are plan members using?
- Channel – From where patients receive their drugs and are they leveraging the lowest-cost channels?
- Supplier – Are you maximizing the prescription benefit manager relationships?
- Care – How do the drug therapies match up to best practices and evidence based medicine?
Educate employees on what they can do to lower their Rx costs
Employers can help employees be smarter when talking to their physician about their medications and making purchasing decisions. If your program includes any of these cost-saving Rx benefit features, make sure your employees understand them:
- Lower copays for generic drugs
- Lower copays for drugs in formularies
- Preferred pharmacies
- Mail-order suppliers
- Prior authorization requirements
- Step therapy requirements (members try lower-cost drugs first before they can move up to higher-cost prescriptions)
Focus on specialty drugs now
Specialty drugs for complex conditions account for 38% of all prescription spending even though they are used to treat about 1 to 2% of all patients. (Consider this recent example of how one employer discovered just two plan members were accounting for 2.5% of their total health budget due to specialty medication prescriptions.) The most expensive biologic breakthrough treatment regimens can exceed $750,000 per year. For the entire US healthcare market, specialty medication spending has nearly doubled since 2011, reaching more than $160 billion. With 40-50 new specialty medications set to enter the market each year, there is no end in sight.
To help gain control over your spending on specialty drugs, consider working with an expert to conduct a specialty diagnostic of medical and pharmacy plans to assess the current state and identify areas for improved management. Once the diagnostic results are in, employers can make informed decisions on revisions to their plan structure. We see savings typically in the 5-10% range. However, these savings occur in the short-term, and so it is a good idea to revisit the plan structure at least semi-annually as provider capabilities change over time.
In a continuing effort to keep you advised of upcoming events of interest, Magellan Rx Management is happy to inform you that the Drug Enforcement Administration (DEA) has scheduled another National Prescription Drug Take-Back Day. The event will take place this Saturday, April 29th, from 10 a.m. to 2 p.m. and is a great opportunity for those who missed the previous events, or who have subsequently accumulated unwanted, unused prescription drugs, to safely dispose of those medications.
Since the first Take-Back day in 2010, over 7.1 million pounds of unwanted or expired medications have been surrendered for safe and proper disposal at over 9,000 sites. Click here to find a collection site near you.
In an environment where cost containment and quality care are constantly challenged, Magellan Rx Management is the smart solution.
Commentary: Twelve years ago, the representative of a third-party administrator sat in my office. As our conversation unfolded, he looked at me in disbelief and objected, “Zack, are you kidding me? No one in their right mind would ever put prescription drug benefits underneath the self-funded medical plan’s stop-loss insurance! What a waste of money!”
In those youthful days, I tended to argue more and replied, “We are beginning to regularly see claimants with annual prescription drug claims of $15,000 or more. If an employer has an individual stop loss of $40,000 and wants to cap its risk at $40,000 per claimant, it would logically place prescription drug benefits underneath the stop loss.”
Twelve years later, even certain high-cholesterol medications are running close to $15,000 per year in cost (for example, Praluent and Repatha). And, it’s now not uncommon to see members on specialty medications exceed $100,000 in annual spend individually. Several market pressures – including innovation, price inflation, drug life-cycle management, increased new-to-market pricing and clinical-guideline changes – are all factoring into this. Two examples are:
- Yervoy/Opdivo combo – $250,000/year (cancer – four-month survival increase)
- Harvoni – $94,000/treatment (hepatitis C – one-time therapy)
Despite the continued escalation in specialty medication costs, many employers sponsoring self-funded health plans have not yet placed prescription drugs underneath the plan’s stop-loss insurance. Why is that?
Are you familiar with the parable of the frog and the boiling water? It goes something like this: If you drop a frog into a pot of boiling water, he’ll jump right out. However, if you place a frog in a pot of cool water and turn on the heat, he’ll happily hang out in the pot long past 212 degrees Fahrenheit. Perhaps our health plans are like the frog, and the rising cost of specialty medications is like the heat.
Look at it this way: If your health plan was presently fully insured and you were moving to a self-funded structure for 2016 with an individual stop loss of $60,000, would you even think twice about including the above specialty drugs within the stop-loss insurance?
In our travels this year, we’ve witnessed:
- A mid-size employer that was forced to modify its entire 2015 business plan when a claimant incurred a cumulative $90,000 specialty prescription drug early in the contract year.
- Major insurers routinely not quoting prescription drugs underneath the stop loss.
- The continued migration from fully insured to self-funding by small to mid-size employers as they seek refuge from the Affordable Care Act’s new premium taxations and “fair health insurance premium” rules.
If your self-funded health plan’s individual stop loss is $200,000 or less, do you agree that it’s time to end the debate on whether or not prescription drug benefits should be covered under the individual stop loss?If your individual stop loss is higher than $200,000, we’ll concede that highly risk-tolerant organizations could still, depending on the underlying break-even mathematics, make a facts- based argument for leaving the prescription drugs uninsured.
- Read your current stop-loss agreement or contract and determine if prescription drugs are covered under the stop loss. If they are not, consider amending your contract now versus waiting until the renewal. Your stop-loss vendor should permit this mid-year change.
- Before purchasing stop-loss insurance, double-check that prescription drugs are covered. If this provision is not stated prominently on page 1, check the assumptions page. Even if your benefit consultant’s RFP requests this provision, vendors will often unintentionally (let’s hope) leave the prescription drug benefit uninsured.
Zack Pace is a senior vice president, benefits consulting at CBIZ, Inc. He can be reached at ZPace@cbiz.com. Follow him on LinkedIn and Twitter at @zpace_benefits. Michael Zucarelli, PharmD, is the national pharmacy practice leader at CBIZ, Inc. He can be reached at email@example.com.