Employee Benefits Market Check Survey: Managing Pharmacy Costs

Employers face significant challenges when managing their pharmacy benefits effectively, and the rising costs of prescription drugs contribute substantially to the overall health care expenditure in the United States. This surge in pharmacy costs directly impacts employer-sponsored health plans and can lead to higher premiums, increased out-of-pocket expenses for employees, and impact on plan design. As employers project a median health care cost increase of 7%, many are examining their pharmacy spend more closely.

We conducted a poll during a webcast on September 21 to gain insight into how employers are thinking about pharmacy costs. The results are in the charts below.

Employers’ Greatest Challenges in Managing Pharmacy for 2024

Based on 198 employer responses.

Employer Strategies for Managing Pharmacy Costs in 2024

Based on 119 employer responses.

UM = Utilization Management PBM = Pharmacy Benefit Manager GPO = Group Purchasing Organization

Key Findings

Employers are significantly emphasizing managing specialty drugs in 2024, with 39% identifying it as their top pharmacy challenge for 2024. Further, 25% are considering carving out or excluding specialty drugs from their plans in 2024. Additionally, over half of employers plan to adjust copays and/or plan designs to manage pharmacy costs in the coming year. Cost shifting can be an easier strategic lever to pull. However, employers may want to re-examine other areas to manage costs, such as coverage of certain medications or where they are filled.

While specialty drugs will be an ongoing issue, having a clear picture of pharmacy claims data will aid employers in setting well-intentioned strategies for the future. While very few see GLP1 medications as a top challenge, plan sponsors should monitor utilization closely in the next year as spending is forecasted to increase significantly.

The complexity of pharmacy spend, with its intricate pricing structures and evolving landscape, demands careful strategic management to control costs while ensuring quality care for employees. Actively managing pharmacy costs is not only essential for the financial health of the business but also for the overall well-being of the workforce. Employers need to explore new ideas and solutions to combat the rising Rx cost curve.

Should you have any questions regarding any of this information or want to discuss your pharmacy strategy, please contact your local Assurex Global adviser.