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News

All News > Prescription Drug Costs

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Price Increases for Prescription Drugs, 2016-2022 (PDF)
Assistant Secretary for Planning and Evaluation [ASPE], U.S. Department of Health and Human Services [HHS] Link to more items from this source
Sept. 30, 2022

"In January 2022, the average price increase was nearly $150 per drug (10.0 percent), and in July 2022, it was $250 (7.8 percent). The dollar increases were larger than for the same months in previous years. In 2022, several drugs increased their list prices by more than $20,000 or by more than 500 percent. There were 1,216 products whose price increases during the twelve-month period from July 2021 to July 2022 exceeded the inflation rate of 8.5 percent for that time period. The average price increase for these drugs was 31.6 percent."

Tags: Prescription Drug Costs

Implementing the Drug Negotiation Provisions of the Inflation Reduction Act: Considerations for CMS
Health Affairs Forefront Link to more items from this source
[Opinion]
Sept. 30, 2022

"While other nations have decades of experience in drug price regulation, the IRA creates a new challenge for Medicare’s administrators. How it carries out this work will have important implications for stakeholders and is critical to determining whether this new authority can be sustained or, as some may hope, built upon to regulate additional drug prices."

Tags: Medicare  •  Prescription Drug Costs

Drugmakers Launch New Medicines at Record-High Prices in 2022
OneDigital Link to more items from this source
Sept. 27, 2022

"The median annual price of 13 new drugs the U.S. Food and Drug Administration approved to treat chronic conditions is $257,000, with eight of the newly launched drugs priced at more than $200,000. By comparison, the median annual price for the first 30 drugs marketed through mid-July 2021 was $180,000 ... Since 2008 ... drug launch prices have skyrocketed by more than 8,400%."

Tags: Prescription Drug Costs

Bringing Pharmacy Costs Into the Light: Transparency Is Key to Capping Costs
BenefitsPro; free registration required Link to more items from this source
Sept. 27, 2022

"Passing through rebates and fees isn't the only benefit of transparent PBMs. A 2019 report ... found pharmacy benefit plan sponsors could also accrue savings 'by reducing the use of high-cost, low-value drugs.' Removing PBM rebates frees them to choose the best value drugs for any given treatment. [The report] estimated that the sponsors it evaluated could save about $63 million annually."

Tags: Prescription Drug Costs

Who Will Benefit from Prescription Drug Price Regulation Changes?
InsuranceNewsNet.com Link to more items from this source
Sept. 26, 2022

"Sponsors of employer/union group Medicare plans may see lower costs ... and supplementary benefits in group Medicare plans will count toward the new $2,000 patient Part D out-of-pocket maximum, making it more attractive for employers to supplement benefits. Some employers fear that drug costs will shift from Medicare to employers. But the high visibility of the lower Medicare prices could create additional leverage for commercial payers to negotiate lower net prices."

Tags: Medicare  •  Prescription Drug Costs

Inflation Reduction Act Includes Key Health Provisions
Miller Johnson Link to more items from this source
[Guidance Overview]
Sept. 22, 2022

"[T]he IRA provides a safe harbor that allows high deductible health plans (HDHPs) to cover insulin before the participant meets the HDHP's deductible without adversely affecting the participant's health savings account (HSA) eligibility. In addition, the IRA ... establishes a system for Medicare to negotiate drug prices with manufacturers ... [which has] the potential to raise group health plans' costs in the future because employer group health plans are not eligible for the negotiated drug price rates or the rebates."

Tags: HSAs  •  Health Plan Design  •  Prescription Drug Costs

Projected 2023 Health Plan Cost Trends
Segal Link to more items from this source
Sept. 22, 2022

"The projected annual cost trend for outpatient prescription drugs is expected to be approaching double-digit levels, the highest rate observed since 2015. Double-digit specialty Rx cost trend, mostly driven by price increases and new-to-market specialty drugs, continues to be a major driver of Rx cost trends. Survey respondents project per-person cost trends for open-access PPO/POS plans to be 7.4 percent."

Tags: Health Plan Costs  •  Prescription Drug Costs

Prescription Drug Reporting Due This Year: Employer Action Required
HUB International Link to more items from this source
[Guidance Overview]
Sept. 21, 2022

"Given the short timeframe between now and the looming reporting due date, employers should work with their insurance carriers, TPAs, PBMs, and other service providers to ensure prescription drug reporting is accurately handled and timely submitted. If local circumstances require that the employer directly report certain information on its own plan's behalf, the employer should familiarize itself with the reporting instructions released by CMS[.]"

Tags: Health Plan Administration  •  Prescription Drug Costs

Healthcare Costs for Employer-Sponsored Plans on the Rise
HealthLeaders Media Link to more items from this source
Sept. 19, 2022

"Health insurers and administers surveyed reported medical trend factors that vary by product, averaging 5.8% to 6.9%, down by 1-2 percentage points from the previous survey. The Preferred Provider Organization plan was at 6.4% for the average trend factor, down by 1.4% from the prior year. With prescription drugs, insurers reported a weighted average trend of 8.1%, down 0.7% from 2021, whereas the weighted average trend reported by Pharmacy Benefit Managers increased from 6.2% to 7.5%."

Tags: Health Plan Costs  •  Prescription Drug Costs

Upcoming Rx Reporting: What About Third-Party Point Solutions?
Mercer Link to more items from this source
Sept. 16, 2022

"As Dec. 27, 2022 -- the deadline to report detailed data to [CMS] about prescription drug pricing and healthcare spending -- approaches, employers should consider whether they must report costs associated with third-party point solutions that provide medical care and are offered to employees. Given the wide range of point solutions available -- from technology to drive engagement, to disease management, fertility benefits, and behavioral health carve-outs -- there isn't a simple answer."

Tags: Health Plan Administration  •  Prescription Drug Costs

Evaluating PBM Contracts: Basic Financial Elements (PDF)
Wakely Consulting Group Link to more items from this source
Sept. 16, 2022

"Evaluation of a traditional RFP or PBM contract should begin with financial analysis of the following four key elements: discount guarantees (typically understood as point-of-sale ingredient costs), dispensing fees, rebate guarantees, and PBM administrative fees. This paper addresses various points of consideration when attempting a financial analysis of these contract elements."

Tags: Prescription Drug Costs

Inflation Reduction Act May Impact Employer Health Plans
EPIC Link to more items from this source
Sept. 15, 2022

"While there is no direct impact on employer-sponsored health plans, caps on Medicare Part D out-of-pocket limits and other cost reductions could affect prescription drug coverage creditable status. Employers must provide notice of a health plan's creditable coverage status at different times, and at least annually before October 15."

Tags: Medicare  •  Prescription Drug Costs

CRS Report: Prescription Drug Discount Coupons and Patient Assistance Programs (PDF)
Congressional Research Service [CRS] Link to more items from this source
Sept. 13, 2022

24 pages. "During the past several years, the U.S. Department of Justice has stepped up enforcement of relevant laws governing manufacturer cost-sharing assistance and has collected billions of dollars in settlements with pharmaceutical companies and patient assistance organizations for allegedly steering Medicare Part D beneficiaries to specific drugs. This paper provides an overview of coupons and patient assistance programs, federal regulation, the commercial marketplace, and federal enforcement efforts." [R44264, updated Sep. 12, 2022]

Tags: Prescription Drug Costs

Your Health Care Dollar: Vast Majority of Premium Pays for Prescription Drugs and Medical Care
America's Health Insurance Plans [AHIP] Link to more items from this source
Sept. 6, 2022

"Prescription drug expenses were 22.2 cents, including calculations for rebates negotiated by health insurance providers and their pharmacy benefit manager partners. Costs for care provided by hospitals included in-patient hospital costs at 19 cents, out-patient hospital costs at 19.9 cents, and emergency costs at 3.3 cents. Doctor visits accounted for 11.8 cents. Taxes and fees represented 3.8 cents."

Tags: Health Plan Costs  •  Prescription Drug Costs

CRS 'In Focus': Selected Health Provisions of the Inflation Reduction Act
Congressional Research Service [CRS] Link to more items from this source
[Guidance Overview]
Sept. 6, 2022

"The Act makes wide-reaching changes to Medicare prescription drug coverage and more targeted changes to Medicaid, the State Children's Health Insurance Coverage Program (CHIP), and private health insurance."

Tags: Health Plan Design  •  Prescription Drug Costs

Prescription Drug Reporting Deadline Approaching
Segal Link to more items from this source
[Guidance Overview]
Aug. 31, 2022

"Group health plans are required to report various information about their prescription drug costs and spending ... The reporting deadlines are: December 27, 2022 for 2020 and 2021 calendar-year data; June 1, 2023 for the 2022 calendar-year data.... [P]lan data may be reported to CMS in the aggregate by pharmacy benefit managers (PBMs), insurers or other reporting entities. There may also be multiple entities reporting information on behalf of a single plan."

Tags: Health Plan Administration  •  Prescription Drug Costs

Reporting Rules for Prescription Drug Costs Present Challenges
Mercer Link to more items from this source
[Guidance Overview]
Aug. 29, 2022

"The departments have issued interim final rules detailing the data to report and recently updated submission instructions describing the mechanics of the reporting process. The updated instructions provide important information about reporting wellness services, prescription drug expenses that are covered by the pharmacy benefit manager and more."

Tags: Health Plan Administration  •  Prescription Drug Costs

Inflation Reduction Act Includes Retirement Plan and Prescription Drug Implications
Willis Towers Watson Link to more items from this source
[Guidance Overview]
Aug. 26, 2022

"[Q]ualified DB pension plans and other non-pension DB benefit plans would be treated for purposes of the alternative minimum tax the same way they are treated for regular federal income tax purposes ... [P]ublicly traded corporations that repurchase more than $1 million in stock will be subject to an excise tax of 1% of the stock's fair market value.... The excise tax will not apply in cases where the repurchased stock (or an amount equal to its value) is contributed to an employer-sponsored retirement plan, employee stock ownership plan or similar plan.... HSA-qualifying HDHPs will be permitted to cover insulin before the annual deductible is satisfied."

Tags: Accounting  •  Funding of DB Plans  •  Health Plan Design  •  Prescription Drug Costs  •  Retirement Plan Administration

The Inflation Reduction Act Is a Foot in the Door for Containing Health Care Costs
Larry Levitt, via JAMA Health Forum Link to more items from this source
[Opinion]
Aug. 26, 2022

"[As] momentous as this legislation is, it goes only so far. Negotiation of drug prices in Medicare will apply initially to a limited number of drugs ... Plus, negotiation does not take effect until well after a drug receives approval from the [FDA] (9 years for small-molecule drugs and 13 years for biological products). Also ... negotiated drug prices will not apply to private insurance plans outside Medicare."

Tags: Health Plan Costs  •  Prescription Drug Costs

What About Us? Inflation Reduction Act Doesn't Help Employers with Prescription Drug Costs
Chelko Center for Benefits Management Link to more items from this source
[Opinion]
Aug. 26, 2022

"Generally speaking, employers have allowed pharmacy benefits managers and health networks to agree to any price on their behalf for years. And most of these intermediaries will agree to any price ... Will employers rise up and change their own purchasing models? Or will they continue to reinforce the opaque, rebate- and markup-driven systems prevalent in the market today? Also, will they cover any drug approved by the FDA regardless of cost?"

Tags: Prescription Drug Costs

Arkansas Warns PBMs to Stop Charging Illegal Fees
National Community Pharmacists Association [NCPA] Link to more items from this source
Aug. 23, 2022

"In a recently released bulletin, the Arkansas Insurance Commissioner made clear to PBMs that they are prohibited from charging pharmacies any fees related to network participation, including pharmacy credentialing or re-credentialing fees. The bulletin was released in response to complaints from pharmacies about these illegal fees."

Tags: Prescription Drug Costs

Inflation Reduction Act Indirectly Impacts Employer-Sponsored Group Health Plans
Thomson Reuters / EBIA Link to more items from this source
[Guidance Overview]
Aug. 19, 2022

"[E]xpanded eligibility for the [premium tax credits] could increase penalty exposure for ALEs that do not offer affordable, minimum-value coverage to all full-time employees.... [T]he improvement to Medicare Part D drug coverage may affect the analysis of whether employer-sponsored prescription drug coverage is 'creditable,' i.e., at least as good as standard Part D prescription drug coverage."

Tags: Health Plan Costs  •  Prescription Drug Costs

Congress Paves the Way for Drug Pricing Reforms with Passage of the Inflation Reduction Act of 2022
Ropes & Gray LLP Link to more items from this source
Aug. 15, 2022

"The Bill's most important health care provisions include [1] establishing a new program for Medicare to directly negotiate prices with pharmaceutical manufacturers for certain high-spend Medicare drugs, with stiff penalties for companies that refuse; [2] requiring manufacturers to pay rebates on drugs reimbursed under Medicare Parts B or D for which average (i.e., net) prices increase faster than inflation; [3] revamping the Medicare Part D benefit, including establishing an annual out-of-pocket cap for beneficiary cost-sharing on prescription drugs and eliminating patient cost-sharing in the catastrophic phase; ... and [5] extending temporary expanded health insurance subsidies for ACA plans through 2025."

Tags: Health Plan Policy  •  Prescription Drug Costs

The Inflation Reduction Act’s Health Provisions
Segal Link to more items from this source
Aug. 12, 2022

"An important part of the law will impact the ACA Exchanges and the Medicare program, including the Medicare Part D program and Employer Group Waiver Plans (EGWPs) used by employers and other plan sponsors to provide prescription drug coverage to retirees.... While the bill caps the amount that individuals covered by Medicare will pay for insulin, it does not adopt requirements that affect group health plan cost-sharing for insulin."

Tags: Medicare  •  Prescription Drug Costs

Inflation Reduction Act Includes Major Medicare Drug Price Reforms But Leaves Out Employer Plans
Mercer Link to more items from this source
Aug. 12, 2022

"Because all the bill's drug pricing reforms apply only to Medicare, however, the legislation is raising worries that it could the result in significant cost-shifting to commercial market plans, meaning higher drug prices and costs for the millions of Americans and their families who get their health coverage through employer-sponsored plans.... The bill also includes a provision that codifies IRS/Treasury rules that allow Health Savings Account (HSA)-qualifying high-deductible health plans to cover insulin on a pre-deductible basis."

Tags: HSAs  •  Medicare  •  Prescription Drug Costs

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