To help control costs and escalating renewal rates, more employers are viewing their healthcare benefits strategy as an integral part of their overall workforce strategy. This is according to National Business Group on Health (NBGH) annual survey of nearly 150 of the nation’s largest employers.
The total cost of worker health benefits has steadily increased year over year and is expected to increase another five percent in 2020, topping $15,000 per employee, according to the survey. And as more specialty drugs come to market, employers will have to contend with the exorbitant prices of some brand-name drugs like Novartis’ Zolgensma, a spinal muscular atrophy treatment nearing a cost of $2 million.
“This is a new frontier, and employers aren’t sure what is the best course to address this. The frustration level around these prices is so high, employers would consider this as a place where the government should be stepping in — from a financing negotiation perspective,” explained Brian Marcotte, NBGH president and CEO in an August 2019 CNBC story.
The NBGH survey reported employers are starting to embrace the idea of government playing a larger role in drug pricing as several pieces of legislation are being debated in Washington, including mandating passing drug price discounts directly on to workers. Today, many of those discounts are held by the pharmacy benefit management company as profit and not passed on to the employer, let alone the employee.
The same CNBC story reported that, by 2022, some 20% of large employers have vowed to take action and do what is necessary to “pass pharmaceutical discounts directly to workers at the pharmacy counter.”
In the meantime, the burden remains heavy on employee benefit managers to deliver the best solutions to their employees – at the most affordable costs for their workforce and their company.
We asked employee benefit managers about their cost containment strategies and what they are most concerned about regarding managing the escalating costs of pharmacy benefits:
“As a small employer with less than 50, how do we protect ourselves while providing the best plan to our customers and their families.”
“Prescription costs have a huge impact on our rates. I am looking for strategies to reduce our prescription spend to help our overall rates.”
“We have one person on a specialty medication that has a significant impact on our renewal numbers since we are a small company. What are our options?”
Many of these and similar issues will be addressed at our free event, “Managing the Impact of High-Cost Medications,” on November 13, 2019. Human resource professionals can start to strategize a new game plan to control costs – while earning 2 hours of recertification credits through the Society of Human Resource Management and HR Certification Institute.
All attendees will have the opportunity to ask questions of speaker panelists from across the pharmaceutical supply chain representing Eli Lilly and Company, Cigna/Express Scripts, Swiss Re and Apex Benefits. The event includes lunch and is free. Registration is due by November 5.