How to Maintain Competitive Pharmacy Benefits Amid Rising Drug Costs

Attracting and retaining talent in today’s extremely competitive job market is critical. As the Great Resignation continues, more than 40% of U.S. workers who switched jobs in the last year are already on the hunt for a new role — with many citing better benefits as a top reason they are seeking new employment.

Employers experienced the smallest healthcare costs increase in decades during the COVID-19 pandemic as individuals deferred care or relied on telehealth, but now the United States will likely see more than a 5% increase in health benefits costs this year.

Prescription drug costs and utilization are also rising. Recent projections show prescription drug spend growing by over $110 billion by 2024, imposing a financial burden on employers and their members. The most significant driver of prescription-drug spending is the rapid growth in the innovation, availability, and use of high-cost specialty medications over the last 10 years.

Now more than ever, employers must go beyond providing a paycheck and find creative ways to offer richer, more competitive benefits packages to attract and retain talent—but to do so without increasing their costs is becoming a significant challenge.

Retain Talent with a Rich Pharmacy Benefits Package

RxBenefits recently surveyed Americans to better understand employee use of specialty medications and preferences around employer-provided Rx coverage, and the data shows the importance of medication coverage to today’s consumers. In fact, 16% of Americans say they would involve their company’s HR department to obtain coverage of specialty medication costs. Additionally, the data shows that 11% of American employees are willing to leave their jobs due to challenges obtaining specialty medication coverage either for themselves or a family member.

With 73% of Americans currently covered by their employer’s health benefits plan for prescription coverage, it’s clear that offering a strong pharmacy benefits package is critical to employee retention.

The cost of doing so, however, can seem daunting.

How Much Is Too Much in Healthcare Costs?

In the aftermath of the pandemic, experts predict increased healthcare costs and higher insurance premiums for decades to come, spurred by rises in both medical and drug spending. Notably, the drug development pipeline is filled with medications to treat rare and complex conditions, which will continue to impact premiums and spending. According to a recent IQVIA report, expensive specialty medications encompassed up to 80% of new FDA approvals in recent years and now represent 53% of spending – outpacing non-specialty drugs for the first time ever in 2020.

All of this presents greater challenges for employers as well as employees trying to obtain specialty medications. In fact, of the 49% of RxBenefits survey respondents who have faced obstacles in obtaining specialty medications, 24% noted their top challenge being overall high cost, followed by 16% who did not receive coverage for their specialty medications under an employer-provided health plan.

For self-funded employers seeking to provide comprehensive coverage for employees, prescription drug costs, particularly for specialty medicines, are a significant concern with more than 60% of employers saying their prescription drug and medical spend is costly and unsustainable. Unfortunately, most employers significantly overpay for pharmacy benefits while receiving suboptimal clinical management and customer service.

Optimized Pharmacy Benefits: Good for Recruitment, Better for Your Bottom Line

For HR leaders navigating the Great Resignation, providing a rich pharmacy benefits plan is an important part of an overall recruitment and retention strategy. However, the benefits landscape is complex, and in the current ecosystem, consultants and self-insured businesses are on their own – there is no body or agency to oversee pharmacy benefits costs and ensure that every member has access to the right medications at the right time and for the right price. Thus, with benefits and specialty drug costs increasingly on the rise, HR executives often find they need an advocate that watches out for their financial interests as well as the health of their employees.

Rising healthcare costs will continue to be a challenge, but they needn’t cost employers the top talent they need to succeed. RxBenefits’ Pharmacy Benefits Optimizer model provides benefits consultants and their self-insured employer clients greater insight into their pharmacy plan performance data, a seat at the negotiating table regardless of their size, a data-driven clinical approach, and high-touch, personalized service. By optimizing pharmacy benefits with a PBO – customizing them to both member health needs and company goals – HR leaders can gain best-in-class rates and rebates, service, and advanced clinical programs without sacrificing on budget.

This is a sponsored article.