The coronavirus (Covid-19) pandemic has caused most employers to rethink almost every area of their business as they struggle to survive. While health insurance companies haven’t released their 2021 “renewal rates” yet, an analysis by Covered California estimates premiums could be increased anywhere from 4 to 40 percent. Now is the time for employers to get creative with their health plan. How to cover prescriptions is often one of the easiest strategies that create the biggest opportunities for savings to both the employer and the employee. In order to create a strategy, we need to understand the problem.
the FDA approved 59 specialty drugs and therapeutic biologics, beating the record set back in 1996. (1)
While by approving 54 new specialty drugs and the most expensive drug in the world called Zolegensma with a price tag of $(1,2) The first half of 2020 we have seen the approval of the first peanut allergy vaccine called Palforzia. (3)
Over the next 5 years, it’s predicted that 35% of a plan’s overall cost will be prescription drugs and the top 3 Pharmacy Benefit Managers (PBM’s) are all owned by 3 of the 4 national insurance carriers.
Why should we care? While these carriers lead us to believe that insurance is transactional, the numbers show that healthcare is actually episodic. There are 1 million children currently living with peanut allergies alone, and the total cost of these drugs will only increase the premiums employers pay as the insurers pass the cost to them.
Take this 140-employee lumber company reference below, for example. Just by making a few changes to how and where their drugs are acquired, they saved $76,000 from 10 of their top 25 drugs being utilized from their prior carrier.
|Drug Name||Scripts||Ingredient Cost||Ingredient Cost Per Script||Claims||Claims Per Script||Evolution RX|
|DESVENLAFAXINE SUCCINATE ER||*||$1,924||*||$1,790||*||$154.84|
140 life group currently fully insured with Anthem. After reviewing the groups Top 25 drug list, 10 drugs were identified that could be acquired through alternative Rx sources within the Evolution health plan for significantly less cost, saving the group over $76,000.
Evolution had the opportunity to present to several employers and brokers across the country on why they should care about the increasing cost of prescription drugs, and what they could do about it. To paraphrase the dialog by most: “Prior to Covid-19, the economy was great, business was good, and most employers were content with “a path of least resistance”. While they were not happy with the carriers, it was easier to just ask what their rate was going to be, play “let’s make a deal” for another year and move on. If the loss of revenue due to Covid, coupled with increase of prescription cost at the current trajectory, employers will have no choice but to evaluate their options. Evolution provides real world solutions to real world problems, just ask us how.