While the debate continues about how to get health care costs under control, one fact remains: Drug prices are on the rise, growing nearly 10 percent from May 2015 to May 2016. These prices are unsustainable for our health care system, employers and American families.
Rising drug prices have real consequences for many employers, unions and others who must find ways to manage their health care costs so they can continue to provide sustainable access to the coverage and medications their workers need. To help achieve this goal, employers and organizations partner with pharmacy benefit managers, or PBMs. The PBMs work to develop a tailored suite of patient-centered health care solutions for each of their partners. These solutions range from programs that help workers stay healthy to negotiation tools that help keep drug prices in check.
The results speak for themselves. To see the value of PBMs for employers and government programs, we need only to compare the estimated list price growth of prescription drugs over the past several years — more than 12 percent in 2015 — to the estimated net price growth, which was held to under three percent. This difference shows the success of innovative management solutions offered by PBMs and the real savings they deliver through their partnerships with employers.
To achieve these savings, PBMs use their scale to negotiate price discounts. They also use their clinical expertise to develop a range of patient-centered programs tailored to the needs of each partner organization, resulting in lower costs and better health outcomes.
For example, PBMs employ clinicians and work with outside experts to develop evidence-based drug formularies to identify when a patient could be saving money by using a clinically equivalent generic to achieve the same health outcome for a lower price. In fact, PBMs have played a leading role in driving the adoption of more affordable generic drugs, which has helped to increase health care savings from $53 billion in 2005 to $227 billion in 2015. With generic drugs accounting for nearly 89 percent of all prescriptions filled in 2015, this can have a significant impact for employers who are working to provide sustainable benefits and to a patient’s pocketbook.
PBMs also offer patient-centered programs such as personalized prescription reminders, home delivery and one-on-one counseling to help patients stay on track with complex medication regimens, manage chronic health conditions and avoid potentially dangerous drug interactions. Research shows this comprehensive, personalized approach results in fewer gaps in care, a reduction in hospital readmissions, better medication adherence and six dollars of savings for every dollar invested in a PBM partnership.
Taken together, drug negotiation tools and patient-centered programs help PBMs save employers and other partners $941 per worker, per year. PBMs help support the employers, unions and government programs providing coverage to more than 266 million Americans, which makes for significant savings.
As policymakers continue to debate how best to address rising drug costs, the private sector solutions offered through a PBM partnership provide a proven template upon which to build future success and savings.
Meghan Scott is executive director of the Coalition for Affordable Prescription Drugs, a broad-based group of employers, unions, pharmacy benefit managers, health plans, and public sector employees and retirees who are working together to be part of the prescription for affordable health.
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