The State of Prescription Benefit Plans

Ninety-nine percent of employers provide prescription drug coverage to active employees compared to 96% in 2011. The survey by Buck Consultants reveals that more employers are contracting with pharmacy benefit managers (PBMs). Sixty-one percent use PBMs compared to 57% in 2011 and 47% in 2009. Sixty-eight percent say pricing competitiveness is an extremely important service from PBMs. Paul Burns of Buck Consultants advised that, “Any PBM contract that is 18 to 24 months old should be reviewed for pricing competitiveness and up-to-date contractual language.”

Seventy-one percent of employers say that pharmacy benefits account for at least 16% of their spending on healthcare benefits. Eighty-seven percent say that providing affordable pharmacy benefits helps contain healthcare costs over the long run.

Pharmacy benefit costs continue to increase, accounting for more than 15% of employers’ total health care costs. If not managed effectively, prescription drugs can be a constant financial drain on company resources and undermine the entire healthcare benefit program, said Burns.

Only 26% of survey respondents have grandfathered health plans. And 42%  of these employers plan to keep their grandfathered plans beyond 2014. Employers are using the following options to comply with the ACA mandate to offer contraceptive products at no cost to plan participants:

  • 27% cover contraceptive generics and brands with no generic equivalent at $0 copay.
  • 25% cover generic contraceptives at $0 copay, and cover others at the brand drug copay level unless deemed medically necessary.
  • 25% cover all prescription contraceptives at $0 copay (The majority of survey respondents provide coverage of immunizations under the medical benefit only, with about 20% offering coverage under the medical and pharmacy benefit.)

One percent or less of covered employees use specialty medications for chronic catastrophic illnesses, such as multiple sclerosis and cancer. But these medications represent 20% or more of pharmacy plan costs. These specialty medications can cost $75,000 or more a year. More than 30% of employers don’t know the portion of drug spending that’s attributed to specialty medications.

Sixty-seven percent of employers have utilization management programs compared to 45% in a prior survey. Fifty-five percent have step therapy protocols to manage specialty drug costs – up from 34%.

Forty-eight percent of respondents offer prescription drug plans to Medicare-eligible participants. But only 55% plan to continue this benefit, down from 75% in the previous survey. Burns said that some employers are considering moving to an employer-group waiver plan to take advantage of additional subsidies under the Affordable Care Act (ACA).  For more information, visithttp://www.bucksurveys.com.

Last Updated 09/16/2020

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