Some of the popular savings programs pharmacy benefit managers have relied on to reduce employer health care spending are not as effective as they once were. To save money in today’s environment requires re-tooling these programs, applying them in new ways, and adopting new strategies.
Explore four innovative tactics to maximize drug savings and contain costs. Adding one or even all these solutions to your pharmacy benefits plan can lower prescription drug costs for employers and plan members now and in the future.
Is your plan embracing these hidden formulary costs and chasing rebate dollars?”
1. Eliminate High-cost, Low-Value medications
Drug manufacturers often combine two low-cost medications to make a single expensive combination drug. They also will modify a drug’s dosage form or strength to create a high-cost formulation.
Two examples of this include:
- Duexis: Two over-the-counter drugs, Ibuprofen (Advil) and Famotidine (Pepcid), were combined into a formulation that costs approximately $1,000 a month.
- Ximino: This medication does not have a generic equivalent but uses the same active ingredient as the low-cost generic Minocycline. Both can be used to treat acne. Ximino has a slight, yet clinically insignificant, difference in strength; yet it can cost 30 times more than Minocycline.
Take a closer look at your plan. Is it rejecting these types of high-cost medications in favor of lower cost, equally effective alternatives? Or is your plan embracing these hidden formulary costs and chasing rebate dollars?
2. Select the Right Rebates
It’s easy to be impressed by big rebate offers for brand name medications. Make sure your PBM is focusing on the lowest net cost, not just rebate savings. Sometimes it's smarter to choose a lower priced drug that is equally as effective, even if it has no rebate.
For example, it's better to cover a $100 drug with no rebate than a $2,000 drug with a $1,500 rebate.
Other tactics to maximize rebates include using a formulary that offers more competitive rebates and making sure 100% of rebates are passed on to the employer. Contract language around pass-through rebates can be complicated, so be sure you understand the definitions and restrictions in your PBM contract.
Learn more about PBM contract definitions and how they impact plans in our webinar recording, Cutting Through PBM Jargon.
3. Consider Advocacy for Specialty Medications
Specialty medications account for approximately 50% of employer drug spending, and that percentage continues to rise. Plan members who need a specialty medication may qualify for a patient assistance program or co-pay card offered through the drug manufacturer; yet many patients don’t know these options are available or how to access them.
Some PBMs offer an advocacy program to help patients access specialty medications through avenues that can significantly reduce costs. True Rx Health Strategists offers employers a solution called True Advocate. With this solution:
Specialty medications are excluded from the plan benefits.
- Each patient is assigned a dedicated case manager who helps the patient access medication and treatment and continues to follow up with care and support.
- Employers see specialty drug spending drop and patients typically pay $0.
- Employers may also want to consider personal importation for specialty medications as one way to reduce costs.
4. Find Unnecessary J-Code Mark Ups
Many specialty infusion medications are billed using a J-Code. These medications are commonly billed through a plan’s medical benefit at a much higher price than they would cost if billed through the pharmacy benefit.
Clinical pharmacists and data analysts with True Rx Health Strategists have studied J-Code drug costs for hundreds of employers. The data shows specialty medications billed as J-codes through the medical benefit are significantly marked up compared to what they would cost through the pharmacy benefit.
Employers who have implemented True Rx’s True Codes solution have saved, on average, $44,000 per year for each plan member who is receiving a specialty infusion medication that falls under True Codes.
True Rx nurses who have experience in infusions work with patients and their health care providers to ensure access to high quality, convenient treatment.
Learn more about specialty infusion drug savings and J-Codes billing in our blog, Not Everyone Bills Medications the Same Way, and our webinar recording, Decoding J-Codes for Employers and Patients.
Discover New Savings Opportunities
To learn how your clients or organization could benefit from these strategies, contact a True Rx Health Strategist at hello@truerx.com. Our health strategists are able to apply plan modeling to your current claims data to produce estimated savings with each solution.
