PMBI Report on Pharmacy Benefits

For many years prescription drugs were one of the fastest growing categories of health costs and received a lot of management attention.  Due to patent expirations, the growth trend has generally plateaued but may reaccelerate with greater use of specialty drugs in coming years.  The PBMI annual report on prescription drug benefits always gives useful insight into current trends and issues.   (PBMI Report)   The main takeaway is that not much has changed since last year.  The survey covered 478 firms with 22.5 million employees; a little over half of the respondents having more than 5000 employees (considered large employers for this survey).  Larger employers continue to generally have more active management features than do smaller ones.  They also tend to have greater retail pharmacy discounts and lower filling fees.  Smaller employers are as likely to offer mail pharmacy as an option and pay about the same for this channel.  In terms of benefit designs, almost all employers now use at least a three-tier formulary, about two-thirds use copays and a third use coinsurance and only about 15% have a deductible in their drug benefits.  The actual amount of cost-sharing has also been fairly steady, with generic copays averaging $11, preferred brands $30-32, and non-preferred brands $56, while specialty copayments are much higher, at an average of $107.  Two-thirds of employers use step therapy and 86% use prior authorization for some classes; neither is much of a change from the prior year.  The most common classes for these management techniques are growth hormones, injectables, controlled substances, sleep medications and Retin-A.  Only 6% of large employers don’t get rebates from manufacturers, while a quarter of smaller ones don’t.   Surprisingly, more of both small and large employers are offering retirees drug benefits.  Over 80% of all these respondents have a self-funded plan.  Only about 30% of the companies offer a preferred or limited pharmacy network, unchanged from last year.  Overall, across all distribution channels and drug tiers, the employee pays about 25% of the drug claim costs, also the same as the prior year.  Value based incentives have flattened, being used at about 50% of employers.  The results of the survey suggest that employers are generally pleased with the general control of drug costs and probably feel that the benefit design and management features they have implemented are working well.