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Benefits in the News > By Subject >

Health plan costs - prescription drugs

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Best Practices for Managing Costs of Orphan Drugs (PDF)
"The overarching 'best practice' management approach for specialty drugs in the medical benefit is to: [1] pay only reasonable costs for drugs, administration, and related fees; and [2] pay only for drugs that are clinically appropriate for the patient.... [T]hese 'simple' objectives aren't easy to carry out for specialty drugs administered in medical sites of care for two reasons.... First, medical claims may be billed with limited information.... Second, drug pricing in the medical benefit is highly, and inappropriately, variable." (Archimedes, via Chelko Center for Benefits Management)
[Opinion] NCPA Offers House Committee Suggestions to Enhance Medicare, Increase Access to Prescription Drugs
"NCPA recommended the following: [1] Enact H.R. 1038 (the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act). The legislation would ban retroactive direct and indirect remuneration (DIR) fees on community pharmacies. [2] Strengthen and finalize proposed CMS guidance on DIR and pharmacy price concessions. [3] Review and standardize how Part D plans measure pharmacy quality and performance in community pharmacies. [4] Enact H.R. 1316 (the Prescription Drug Price Transparency Act) to increase transparency into how generic drugs are priced by PBMs and paid for in Medicare." (National Community Pharmacists Association [NCPA])
2017 Milliman Medical Index
"In 2017, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $26,944, according to the Milliman Medical Index (MMI).... The MMI's annual rate of increase is 4.3%.... Prescription drug trends are lower, but still high.... Employees pay a bigger piece of the healthcare cost pie." (Milliman)
Prescription Drug Costs Break Through the Partisan Logjam
"Republicans are almost as likely as Democrats, and more likely than independents, to pick lowering the costs of prescription drugs as a priority for President Trump and the Congress. It's the number two priority in health for all Americans, just behind reducing out of pocket costs in general." (Drew Altman of the Kaiser Family Foundation, via Axios)
No Standing for Union Health Plan Claims Against Sanofi for Free Drug Sample Scheme
"A union health plan lacked standing to bring state unfair trade practices claims against a pharmaceutical company it charged caused monetary damage through a free samples scheme involving the osteoarthritis medication Hyalgan, and a diabetes drug switching scheme, because they failed to specifically allege that the plan or any of its beneficiaries paid, let alone overpaid, for the drug in the relevant states during the relevant time period[.]" [Plumbers' Local Union No. 690 Health Plan v. Sanofi, S.A., No. 15-956 (D.N.J. May 4, 2017)] (Wolters Kluwer)
[Opinion] NCPA Urges Senate to Retain Key Prescription Drug Benefit Provisions of ACA
"[P]harmacist-provided prescription drug therapy is 'incredibly cost effective' in helping improve medication adherence by patients, which in turn 'improves health outcomes and reduces much more expensive interventions, such as emergency room treatment.' ... [Up] to $290 billion in annual health care expenses result from the lack of medication adherence ... [A] leading predictor of adherence is a patient's proximity to and relationship with a pharmacist." (National Community Pharmacists Association [NCPA])
Three Approaches to Controlling Rx Costs
"Analyze the data on prescription drug spend in your plan ... Educate employees on what they can do to lower their Rx costs ... [C]onsider working with an expert to conduct a specialty diagnostic of medical and pharmacy plans to assess the current state and identify areas for improved management." (Mercer)
Drug Maker Sanofi Says It Will Tie Price Increases to Health Spending
"The company says it's adopting a three-pronged approach that includes setting launch prices for its new drugs worldwide by measuring 'value' -- meaning, among other things, how well they work for patients. In the United States, Sanofi will also disclose annual increases in its list prices, before and after the discounts given to health insurers." (The Boston Globe)
Did Medicare Part D Reduce Mortality?
"[The authors] investigate the implementation of Medicare Part D and estimate that this prescription drug benefit program reduced elderly mortality by 2.2% annually. This was driven primarily by a reduction in cardiovascular mortality, the leading cause of death for the elderly. There was no effect on deaths due to cancer, a condition whose drug treatments are covered under Medicare Part B.... [T]he value of the mortality reduction is equal to $5 billion per year." (Journal of Health Economics; purchase required)
Frequently Asked Questions About Prescription Drug Pricing and Policy (PDF)
37 pages. "This report will address frequently asked questions about government and private-sector policies that affect drug prices and availability. Among the prescription drug topics covered are federally funded research and development, regulation of direct-to-consumer advertising, legal restrictions on reimportation, and federal price negotiation. The report provides a broad overview of the issues as well as references to more in-depth CRS products. The appendixes provide references to relevant congressional hearings and documents ... and a directory of CRS prescription drug experts[.]" [Report R44832, May 2, 2017] (Congressional Research Service [CRS])
Rising Costs for Patented Drugs Drives Growth of Pharmaceutical Spending in the U.S.
"Analysis of a seven-year trend ... shows that prescription drug spending has increased 10 percent annually for Blue Cross and Blue Shield (BCBS) members since 2010, an overall rise of 73 percent. This upward trend is due to a small fraction of emerging, patented drugs with rapid uptake and large year-over-year price increases that are more than offsetting the continued growth in utilization of lower-cost generic drugs.... [W]hile consumer out-of-pocket costs have risen just three percent annually for prescription drugs in total, they have risen 18 percent annually for patented drugs. Current trends suggest that this rapid rise in drug trend costs is likely to continue in future years." (Blue Cross and Blue Shield Association)
Attention Turns to Specialty Pharmacy (PDF)
"Specialty biotech drugs represent 1 to 2% of prescriptions yet 35% or more of overall pharmacy costs -- and are projected to reach 50% of costs over the next three years. In the United States, the cost of these drugs is multiples more than in other countries, and their use presents global competitiveness and philosophical challenges for plan sponsors. This article examines specialty drug trends, discusses balancing access to them versus their impact and reviews the current state of specialty drug management." (Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS])
The PBM Story: What They Say, What They Do, and What Can Be Done About It
"Pharmacy benefit managers (PBMs) say they reduce drug prices and increase patient access, but the facts just don't bear that out.... PBMs got their start as useful claims processors but then morphed into large corporations more interested in extracting profits from the prescription drug supply chain than in ensuring medication affordability and access. And that's the real story: PBMs have done more to enrich themselves over the past 25 years than they have done to bring down drug costs." (National Community Pharmacists Association [NCPA])
Health Insurance Companies Respond to Opioid Epidemic
"According to a September 2016 study ... the total annual cost of the U.S. opioid epidemic is $78.5 billion, most of which is attributed to insurance coverage. The impact of this crisis is having a significant effect on benefit claim costs and more so on overall productivity of the private employer workplace. With this in mind, this document outlines the posture and reformative contractual changes being taken by insurers in the health insurance industry." (EBCG)
Employers Need New Evaluation Process of PBMs to Control Drug Costs
"For the first time this year, large employers noted a surge in spending on pharmaceuticals as a top cost driver of health costs ... Many companies follow a traditional RFP approach when selecting a PBM. Prescription drugs are listed and the costs associated with each drug are tallied in a spreadsheet. Benefit specialists need to try and understand the way a PBM manages prescription drug spending to get a clearer picture of costs for their organization." (Healthcare Trends Institute)
Cigna Touts Progress in Effort to Curb Opioid Use
"Cigna's effort to tackle the opioid epidemic has resulted in a 12% decline in customers' use of prescribed opioids in the last year ... The insurer said its efforts to combat the opioid epidemic have included analyzing claims data to detect patterns that suggest opioid misuse and notifying those individuals' providers.... Starting in July, Cigna will go further by placing quantity limits on most new short-acting opioid prescriptions." (FierceHealthcare)
California Bill Would Require Disclosure of PBM Rebates
"The bill would require [pharmacy benefit managers] to disclose: [1] The percentage of all oral prescriptions and self-administered drugs that were dispensed through pharmacies affiliated with the PBM and the percentage of oral and self-administered medications dispensed through retail pharmacies; [2] The total amount of discounts or price concessions the PBM received that were attributable to California residents whose drug benefits were managed by the PBM; [3] The amount and types of rebates, discounts or price concessions provided to health care plans that could be attributed to patient use under those plans; and [4] The amount of the rebates, discounts or price concessions that are passed through to enrollees and the total number of prescriptions dispensed." (AISHealth)
[Opinion] Proposed Legislation Would Lower U.S. Prescription Prices
"Among other reforms, the [Improving Access to Affordable Prescription Drugs Act] would curb the monopoly abuses of pharmaceutical corporations that keep prices high, penalize companies that engage in price gouging, finally allow Medicare to negotiate fair prices for seniors, cap out-of-pocket medicine costs in health insurance plans and require transparency from the pharmaceutical industry." (Public Citizen)
Pharmacy Benefit Managers: Market Power and Lack of Transparency (PDF)
"While a plan sponsor faces the direct financial costs of the particular prescription plan being offered to its members or employees, only a PBM has a complete understanding of the prices and costs flowing between the various players involved in prescription plans....[which creates] an environment for conflicts that drive PBMs to work for their self-interests, unbeknownst to the sponsor or beneficiary.... [This article] will evaluate the industry structure, conduct and performance, in order to determine whether there is a presence of sustained market power that poses serious anticompetitive risks for consumers and that requires a public policy remedy." (The American Consumer Institute)
Ask Your Doctor If It's Right for You: Prescription Drug Costs -- and TV Ads -- on the Rise
"[Pharmaceutical advertising] exceeded $6 billion last year, with television picking up the lion's share ... [T]he ads inevitably promote high-priced drugs, some of which doctors say have limited practical utility for the average patient-viewer.... Critics say the ads encourage patients to ask their doctors for expensive, often marginal -- and sometimes inappropriate -- drugs that are fueling spiraling health care spending." (Kaiser Health News)
$89,000 Orphan Drug Gets a New Owner -- and Likely a New Price
"Marathon Pharmaceuticals' controversial $89,000-a-year drug ... is getting a new owner.... PTC Therapeutics announced plans ... to buy the Duchenne muscular dystrophy drug Emflaza from Marathon for $140 million in cash and stock. The drug's new price was not announced.... For years, many American patients have imported the generic version at a cost averaging from $1,000 to $1,600 annually. The cost typically was not covered by insurers." (Kaiser Health News)
U.S. Could Drive Down Drug Prices By Exercising Patent Rights
"When the federal government -- through an agency like the National Institutes of Health -- pays for medical research that leads to an invention that can be patented, federal law gives the government a license to use that intellectual property ... as a check, to ensure that the medicines are available to the public on 'reasonable terms.' But ... the government has never used [that] authority." (National Public Radio)
[Opinion] Myths vs. Facts on Pharmacy Benefit Management Arguments Against Bipartisan Legislation to Control Drug Costs
"[On] March 6, 2017, the trade group for PBMs unleashed an array of misleading and false statements to protest H.R. 1316, The Prescription Drug Price Transparency Act introduced by Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa). Here is an examination and rebuttal to their critique." (National Community Pharmacists Association [NCPA])
To Save on Drug Costs, Insurer Wants to Steer You to 'Preferred' Pharmacies
"Blue Shield of California wants to create 'a tiered pharmacy network' in its 2018 small- and large-group plans ... If the proposal is approved ... it would affect the coverage of more than 1.8 million consumers, based on 2015 numbers from the [California Department of Managed Health Care].... [C]onsumers still would have a broad selection of pharmacies, but they would have to choose a 'preferred' pharmacy to maintain this year's copayment amount. Outside of that network, consumers could pay up to $50 more for the same prescription[.]" (Kaiser Health News)
Beyond the ACA, the Affordability of Insurance Has Been Deteriorating Since 2015
"Since 2015, larger shares of people with health insurance say they have a difficult time affording their health care costs: from 27 percent to 37 percent for premiums, 34 percent to 43 percent for deductibles, and from 24 percent to 31 percent for copays and prescription drugs." (Henry J. Kaiser Family Foundation)
Value-Based Insurance Design Can Help Drive Medication Adherence with High-Deductible Plan
"[W]hen their employers switched to a high-deductible plan, 41% were enrolled in a plan with a [value-based insurance design (VBID)] benefit that provided free preventive chronic disease medication at no out-of-pocket cost to the beneficiary.... [A]dherence among the patients without the VBID benefit dropped from 76.1% to 73.8%, while adherence remained steady among those with the VBID benefit.... However, the VBID intervention did not appear to impact adherence among certain subgroups." (American Journal of Managed Care)
R&D Costs for Pharmaceutical Companies Do Not Explain Elevated U.S. Drug Prices
"[T]he premiums pharmaceutical companies earn from charging substantially higher prices for their medications in the US compared to other Western countries generates substantially more than the companies spend globally on their research and development. This finding counters the claim that the higher prices paid by US patients and taxpayers are necessary to fund research and development. Rather, there are billions of dollars left over even after worldwide research budgets are covered." (Health Affairs)
Where Does Your Health Insurance Premium Dollar Go?
"Your premium, or how much you pay for your health insurance each month, covers the costs of providing your insurance as well as the medical care you might receive -- everything from prescription drugs and doctors' visits to health improvement programs and customer service. Here is a visual breakdown of where your premium dollar really goes." (America's Health Insurance Plans [AHIP])
Facing Pressure, Insurance Plans Loosen Rules For Covering Addiction Treatment
"Aetna will stop requiring doctors seek approval before prescribing particular medications -- such as Suboxone -- that are used to mitigate withdrawal symptoms, and typically given along with steady counseling.... The change comes as addiction to opioids, which include heavy-duty painkillers and heroin, still sweeps the country.... And it puts Aetna in the company of Anthem and Cigna, which both recently dropped the prior authorization requirement for privately insured patients across the country." (Kaiser Health News)
[Opinion] Fighting Pharmacy Inflation
"With aligned incentives, drug formularies, quantity limits, prior authorization and step therapy can all be effective. However, patients and their doctors are very vocal about any restrictions and as a result the pushback to employers is fervent -- and without these requirements the cards are stacked. In order to control costs, the system must be rebuilt to effectively address rising costs." (Frenkel Benefits)
How Insurers Are Working to Combat Rising Prescription Costs
"Higher cost-sharing ... Quantity limits ... Formulary ... Step therapy ... Limited network of specialty pharmacies ... Performance-driven pricing." (Healthcare Trends Institute)
Policy Recommendations to Promote Sustainable, Affordable Pricing for Specialty Pharmaceuticals
31 pages. "[T]his brief explores the dynamics of the specialty pharmacy market -- including the growth in specialty pharmaceutical development; price and price inflation; increases in utilization for an expanding list of conditions; and the impact of vertical consolidation on specialty drug prices.... [It] identifies areas of opportunity for employers to better manage specialty drugs, followed by a look at public policy barriers to better pricing ... [and] concludes with public policy recommendations for more sustainable, affordable pricing." (National Business Group on Health [NBGH])
[Official Guidance] Text of President Trump's Executive Order: 'Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal'
Signed on Jan. 20, 2017. "To the maximum extent permitted by law, the Secretary of Health and Human Services and the heads of all other executive departments and agencies with authorities and responsibilities under the Act shall exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the Act that would impose a fiscal burden on any State or a cost, fee, tax, penalty, or regulatory burden on individuals, families, healthcare providers, health insurers, patients, recipients of healthcare services, purchasers of health insurance, or makers of medical devices, products, or medications.... To the maximum extent permitted by law, the head of each department or agency with responsibilities relating to healthcare or health insurance shall encourage the development of a free and open market in interstate commerce for the offering of healthcare services and health insurance, with the goal of achieving and preserving maximum options for patients and consumers." (The White House, via Fox News)
[Opinion] Can President Trump Reduce Drug Prices? Should He?
"When deciding whether and how much to pay for drugs, most industrialized nations rely to a certain extent on cost-effectiveness analysis. And if a drug is not cost-effective, then the health system refuses to pay for it.... A good first step would be to eliminate rules under Medicare Part D that force insurers to cover many drugs, seemingly regardless of the price.... Without profits from the United States, then the pipeline of R&D will begin to dry up." (David Dranove and Craig Garthwaite, at Code Red)
Six-Month Market Exclusivity Extensions to Promote Research Offer Substantial Returns for Many Drug Makers
"[F]or the thirteen FDA-approved drugs that gained supplemental approval for a rare disease indication from 2005 through 2010, the median projected cost of clinical trials leading to approval was $29.8 million. If the exclusivity extension had been in place, the median discounted financial gain to manufacturers would have been $94.6 million.... Extending market exclusivity would provide substantial compensation to many manufacturers, particularly for top-selling products, far in excess of the cost of conducting these trials." (Health Affairs)
OPM Asks FEHBP Carriers to Focus on Rising Prescription Drug Use and Costs
"All insurance carriers participating in the Federal Employees Health Benefits Program [FEHBP] in 2018 should continue their efforts to effectively manage prescription drug use among beneficiaries while trying to rein in escalating costs ... OPM wants carriers to 'reexamine' opportunities to reinforce or add to management techniques that help balance those dual goals, since rising drug prices and more prescription drug use in health care are driving up FEHBP premiums. According the agency, 25.5 percent of the FEHBP health care budget was spent on drugs in 2015." (Government Executive)
[Opinion] Negotiating Trumped Up Drug Costs
"Investors were clearly unsettled after hearing [President-Elect Trump's] remarks and claims to negotiate drug pricing, but what does 'negotiate drug pricing' really mean? ... To negotiate, one needs leverage. To get leverage, alternatives are needed.... Drug costs need more transparency and those costs must be more visible to the user." (Frenkel Benefits)
CVS, Cigna Decisions Encourage Use of Cheaper EpiPen Alternatives
"Shortly after Cigna announced it would stop covering the name-brand EpiPen, CVS declared it would begin selling a cheaper generic version of the costly epinephrine injector.... Cigna issued a statement explaining its decision to revise its covered drug list in hopes that it would 'encourage use of the generic version as it will deliver more overall value to customers and clients.' " (American Journal of Managed Care)
Text of Eighth Circuit Opinion: ERISA Preempts Iowa Requirement for Reporting by Pharmacy Benefit Managers (PDF)
13 pages. "Iowa's law compels PBMs as third-party administrators to report to the commissioner and to network pharmacies their methodology for establishing reimbursement amounts paid to pharmacies for providing certain generic drugs to plan participants.... [This statute] imposes mandates and restrictions on a PBM's relationship with Iowa and its pharmacies that run counter to ERISA's intent of making plan oversight and procedures uniform.... ERISA's express preemption clause requires invalidation of the statute as applied to PBMs in their administration and management of prescription drug benefits for ERISA plans." [Pharmaceutical Care Management Association v. Gerhart, No. 15-3292 (8th Cir. Jan. 11, 2017)] (U.S. Court of Appeals for the Eighth Circuit)
Drug Prices Expected to Rise 12 Percent in 2017, Faster Than Wages
"Prescription drug costs for Americans under 65 years old are projected to jump 11.6 percent in 2017, or at a quicker pace than the 11.3 percent price increase in 2016 ... Older Americans won't get much of a break: Their drug costs are projected to rise 9.9 percent next year, compared with 10.9 percent in 2016. By comparison, wages are expected to rise just 2.5 percent in 2017." (CBS MoneyWatch)
Seven Tips for Adding Prescription Drug Coverage Limits
"Plan sponsors can ask participants to pay attention to drug prices and to ask their doctors to prescribe lower cost generics or over-the-counter drugs when possible. Participants can be asked to fill prescriptions at lower cost pharmacies or specific pharmacies. Sponsors may need to explain why they're excluding certain high-cost drugs from coverage or making them more expensive when a less-expensive alternative is available." (International Foundation of Employee Benefit Plans [IFEBP])
Sudden Price Spikes in Off-Patent Prescription Drugs: The Monopoly Business Model That Harms Patients, Taxpayers, and the U.S. Health Care System (PDF)
131 pages. "[A] bipartisan Senate Special Committee on Aging investigation of abrupt and dramatic price increases in prescription drugs whose patents had expired long ago ... centered on ... [four] companies that acquired decades-old, off-patent affordable drugs and then raised the prices suddenly and astronomically.... This Report closely examines the business model used by these companies; provides case studies of the four companies; explores the influence of investors; assesses the impacts of price hikes on patients, payers, providers, hospitals, and governments; and discusses potential policy responses." (Special Committee on Aging, U.S. Senate)
The Painful Truth: Opioids and Your Health Plan
"Opioid abusers cost employers nearly twice as much ($19,450) in healthcare expenses on average annually as non-abusers ($10,853), or $8 billion annually in medical expenses alone. Opioid abuse costs employers an additional $10 billion from absenteeism and presenteeism.... One out of every three opioid prescriptions is being abused. 259 million opioid prescriptions were written in 2012, enough for every American adult to have their own bottle of pills." (Chelko Center for Benefits Management)
Employers Act to Control Pharmacy Cost Trend
Infographic. "A surge in specialty pharmacy requires companies to employ a host of approaches, emphasizing specialty pharmacy utilization in order to be a best performer." (Willis Towers Watson)
Decoding Two Common PBM Pricing Models
"Many employers don't understand the often jargon-filled and confusing terms and PBM pricing models, which might allow the TPA to manipulate the value proposition and maximize their own profits.... There are generally two PBM pricing models used with plan employers to deliver prescription benefits to employees: The traditional pricing model and the pass-through pricing model." (Corporate Synergies)
Need Pricey Drugs from an Obamacare Plan? You'll Shoulder More of the Cost
"Substantially more health plans on the federal insurance marketplaces require consumers next year to pay a hefty portion of the cost of the most expensive drugs, changes that analysts say are intended to deter persistently ill patients from choosing their policies." (Kaiser Health News)
Rising Drug Costs Lead to PBM Scrutiny
"Profits have risen as PBM consolidation has occurred. They have also become more aggressive with contracting as pharmaceutical companies have found new ways to increase their own profits. When new areas of spend develop, so too can a program from the PBM to manage that trend, but not all programs may actually save money for the employer." (The Alliance)
One Employer Fights Against Prescription Drug Abuse
"The 55,000-person company requires employees in some plants to attend training sessions on identifying and addressing drug activity and prescription-drug abuse.... After a positive test, the company steers workers to treatment if needed and reassigns them from safety-sensitive jobs.... Nearly one in three opioid prescriptions covered by employer health plans is being abused[.]" (The Wall Street Journal; subscription may be required)
California Voters Reject High-Profile Drug Pricing Measure; Colorado Rejects Statewide Single-Payer
"Early Monday morning, with more than 97 percent of the vote reported, a measure to limit what the state [of California] will pay for prescription drugs appeared headed for defeat. Meanwhile, Colorado rejected an initiative to build a statewide single-payer health care system -- a notable defeat for a policy proposal championed by politicians such as former Democratic presidential candidate and Vermont Sen. Bernie Sanders. It also became the sixth state to allow terminally ill patients to receive medication that would end their lives." (Kaiser Health News)
CMS Acting Administrator Says Drug Industry Has Too Many 'Bad Actors'
"Andy Slavitt, the acting administrator of [CMS], said there were too many 'bad actors' in the industry, backing away from what he said was his own defense of the sector last year ... 'You know, last year when I spoke here, the price increases at Turing were making news, and I told you I didn't want this industry to be defined by its worst actors,' Slavitt said. 'I defended the industry then, but the more data that's revealed, the more bad actors you find, and I'm telling you now: it's too many.' " (Morning Consult)
U.S. Employers Step Up Efforts to Manage Prescription Drug Costs
"With regard to specialty drugs, strategies growing in popularity include: [1] Evaluating specialty drug spend through the medical benefit instead of the pharmacy benefit. Today, 39% of employers have adopted this strategy, up from 26% in 2015; 82% will consider it by 2018. [2] Making changes to coverage to influence where and how specialty drugs are administered. Today, 19% of employers have made such changes; another 43% are considering them for 2018. [3] Establishing different copays for specialty drugs to promote the use of lower-cost alternatives such as biosimilars. Today, 18% of employers have done this, a number that could triple over the next two years." (Willis Towers Watson)
What Are Recent Trends and Characteristics of Workers with High Drug Spending?
"Growth in prescription drug spending had slowed, but increased rapidly in 2014 nationally and for employer-sponsored plans ... Spending has increased for both retail and non-retail drugs ... Workers and their family members with certain diagnoses have much higher average drug spending ... The majority of people with employer coverage have little or no retail drug spending, but about 3.9% exceed $5,000 in drug spending." (Henry J. Kaiser Family Foundation)
Examining High Prescription Drug Spending for People with Employer-Sponsored Health Insurance
"Average retail drug spending in employer plans held relatively steady from 2004 to 2013, ranging from $909 in 2004 to $947 in 2013 (adjusted for inflation), before growing 13.0% in 2014 to $1,053 per enrollee.... [R]etail prescription drug spending does, however, represent a larger share of total employer insurance benefits (21%) than retail drugs represent as a share of total national health spending (10%), so growth in prescription drug spending may have a relatively large effect on employer-sponsored health insurance premiums." (The Peterson Center on Healthcare and the Kaiser Family Foundation)
Prior Authorization Pilot Reduced Health Plan's Cancer Drug Costs by 20%
"At the end of the 1-year period, Florida saw a 9% change in cost, national costs increased by 10%, and southeast regions increased by 11%. The difference in the changes between the control regions and Florida translated into a $5.3 million savings for Florida during the 1-year period." (American Journal of Managed Care)
Employers Prepare for 2017 Drug Price Hikes
"[F]or active employees and retirees under age 65, prescription drug costs are projected to rise 11.6 percent in 2017 for active employees, up from 11.3 percent in 2016. The projected rise in specialty drug/biotech medications in 2017 continues to be exceptionally high 18.7 percent. While typically less than 1 percent of all medications are specialty drugs, survey respondents indicated that those drugs now account for 35 percent of total projected prescription drug cost increases for 2017[.]" (Society for Human Resource Management [SHRM])
[Opinion] Did Landmark Laws From Congress Enable High Drug Prices?
"In the last 13 years, Congress passed major legislation that expanded taxpayer-financed coverage for prescription drugs but lacked explicit mechanisms for dealing with costs, instead relying mainly on market forces.... Government-sponsored coverage injected more dollars into the market for medications, and new consumer protections curtailed some blunt instruments insurers used to control costs, such as annual and lifetime limits on the dollar value of coverage." (
Double-Digit Rx Benefit Cost Trends Projected for 2017 (PDF)
15 pages. "Medical cost trend projections for actives and early retirees [are] relatively flat ... Medical trend projections for retirees are low but rising ... Prescription drug trend projections are high, approaching 20 percent for specialty drugs ... Cost trend rates continue to outpace increases in prices and wages ... Price inflation continues to be the leading driver of cost trend projections ... A range of cost-management strategies are being used." (Segal Consulting)
Specialty Drug Costs Soar 30% for CalPERS
"Specialty drug costs jumped 30 percent last year to $587 million for [CalPERS], one of the nation's largest health care purchasers. Though they amount to less than 1 percent of all prescriptions, specialty drugs accounted for more than a quarter of the state agency's $2.1 billion in total pharmacy costs. Those overall drug costs have climbed 40 percent since 2010." (Kaiser Health News)
Fewer Prescription Drugs Covered by ACA Marketplace Plans in 2017
"In 2017, 200 drugs may be taken off pharmacy's formularies.... CVS Health will leave 154 prescriptions off of its formularies and Express Scripts will keep 85 drugs off of its formularies next year. Drugs that are not covered will include some treatments for diabetes and hepatitis." (eHealth)
[Opinion] Capping Copays Will Raise Premiums and Drug Prices
"The Manhattan Institute estimates a $250 per month cap on out-of-pocket drug spending would benefit only about 1 percent of all Americans who take any prescription drug in a given year. Furthermore, nearly half of the benefits from a copay cap would accrue to families earning more than four times the federal poverty level. Such a law would also raise premiums for all policyholders and facilitate drug price hikes." (National Center for Policy Analysis [NCPA])

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