Periodic surveys of employers regarding their health benefit actions provide invaluable insight into real world developments in response to continuing spending growth. For over 15 years the Pharmacy Benefit Management Institute has surveyed employers regarding their drug benefits and this year’s report covered 274 companies providing benefits to 5.2 million people. (PBMI Report) A key finding is that plan design, especially in connection with cost-sharing, continues to become more complex. Much of this complexity is driven by specialty drug costs. The use of four-tier plans, with the fourth tier usually being expensive specialty compounds, has grown to 25% of employers. And 34% of plans now use coinsurance as a cost-sharing mechanism, up from only 14% in 2008.
Generic and brand drug copays have been relatively flat, but specialty copays increased by 37%, with the average growing from $61 to $84. In general the copay differences between tiers continues to grow, with generics staying relatively low while brand copays have increased. The spread between the two has grown from $7 in 2000 to $16 in 2011. Similarly, the difference between copays for preferred brand drugs and copays for nonpreferred ones has increased from $13 in 2000 to $20 in 2011. For maintenance meds with a 90-day prescription, for years most plans had relied on mail pharmacies to keep costs low. Now, however, 60% of employers have plans covering a 90 day supply at retail pharmacies, although the copays still tend to be lower for maintenance prescriptions filled by mail. The trend, however, has to be worrying to PBMs, which really make most of their money on the ingredient cost spread on mail order drugs, especially mail order generics.
Specialty pharmacy has everyone’s attention, particularly where it is included in medical benefits as well as drug ones. Employers are attuned to the problem and are using the same cost-control strategies on the medical benefit, with 24% now restricting coverage in some way for those drugs. On the drug side, 30% of employers require specialty drugs to be dispensed by the PBM’s specialty pharmacy arm and 48% overall have some limited designation of pharmacy sources for such compounds. Employers are also using a variety of other strategies to limit utilization and cost of these drugs, such as prior authorization, supply limits and coinsurance. While drug costs have a lesser growth rate than a decade ago, the emergence of specialty drugs has created new benefit design and management concerns for employers and payers.