Strategies to help keep pharmacy care costs in check
As inflation continues to impact the U.S., nearly every facet of American life has felt the effects. You see price hikes at the grocery store — and even at the pharmacy. If you’ve had to pick up a prescription lately, you may have noticed a jump in cost when you check out. You’re not imagining things – prices in prescriptions are going up.
In 2023, drugmakers started the year by raising prices of 450 different medications — with more price hikes expected.
Price hikes are steep and steady
This isn’t new in the prescription world. Costs have steadily continued to climb, increasing 9.4% in 2022 for a total of $633.5B.
“The cost of increases in drugs is greater than any other service or market; the only thing even close is college education,” said Matthew Vesledahl, chief affordability officer of UnitedHealthcare Employer & Individual.
Matthew notes prices have risen between 5% and 15% annually during the last two decades, forcing many employers to have to make difficult decisions. In some cases, this includes shifting costs to employees, raising deductibles or even ending coverage entirely for certain drugs.
But there are solutions that may help employers — and their employees — better manage the cost of prescriptions. Here are three strategies to consider.
1. Integrate pharmacy and medical benefits
By taking a holistic approach to patient care and integrating medical and pharmacy benefits, members may save money and improve health outcomes.
For example, let’s say two drugs provide the same protection and effectiveness but the price differs drastically — by thousands. Someone with separate medical and pharmacy benefit carriers may end up receiving the far more expensive medication, because their carrier and pharmacy benefit manager (PBM) are not synced up on how to manage treatment options under both benefits.
“If you buy your medical and pharmacy benefits together, you are more likely to end up with a better cost outcome than if you didn’t otherwise,” Matthew said. “If you don’t manage holistically across your benefits, you risk higher costs.”
2. Increase price and treatment option transparency
The rapid growth, variety and complexity of possible treatments can be difficult to track, especially when faced with a challenging diagnosis. But this also highlights the need to improve collaboration and integrate patient and prescription cost information into providers’ workflows.
For example, the UnitedHealthcare Cancer Guidance Program (CGP) uses evidence-based treatment management and analytics to help ensure quality care with reduced costs. This has led to a 10-to-1 return on investment for some employers, as it leads oncologists to the highest-quality, most cost-efficient treatment regimen option and expedites required authorizations.
Other tools, like UnitedHealthcare PreCheck MyScript®, helps prompt prescribers when there is a lower-cost drug alternative at the time of care with a patient. Employers may save an average of $285 per switch and employees an average of $111 per fill, when a lower-cost alternative is selected1.
Employees themselves may have additional tools to help them compare prices for traditional generic drugs based on their insurance coverage. These collaborations are becoming increasingly common and are necessary to change the trajectory of pharmacy care costs.
3. Increase access to life-saving drugs
UnitedHealthcare was the first in the industry to eliminate all out-of-pocket costs for five vital medications for eligible members:
- Insulin to treat diabetes
- Epinephrine to treat allergic reactions
- Glucagon to treat hypoglycemia
- Naloxone to treat opioid overdoses
- Albuterol to treat acute asthma attacks
“These are life-saving drugs,” says Kelley Nolan-Maccione, chief product officer of UnitedHealthcare Employer & Individual. “Without these medications, the outcome of an event can be fatal. You don’t want to be in a situation where you are rationing them or taking a chance, because it truly can come down to life or death.”
Some of the emergency-use drugs covered by the new $0 out-of-pocket policy — which applies to about 8.3M members — might otherwise cost hundreds of dollars, Kelley notes2.
One more thing
Prescription Drug Lists (PDL) and utilization management programs, including prior authorizations, are also helping to manage the costs of some of these drugs. UnitedHealthcare PDLs, for instance, are built to incentivize employees to use covered, clinically appropriate and cost-effective medications.
The rise in pharmacy care costs will continue to challenge health systems to collaborate and innovate in ways they haven’t before. But these examples help show it may be possible to achieve better health outcomes, a simpler experience and lower costs.
Learn more information on cost management efforts.