Researchers find reduced medical spending associated with integrated pharmacy benefits
Researchers suggest employers weigh any potential savings of a pharmacy benefits carve-out against increases in medical spending.
Patients with chronic illnesses receiving an integrated pharmacy benefit experienced slower medical cost growth compared with members covered by a pharmacy carve-out, according to a study reported in the “American Journal of Managed Care.”
Since their introduction in the 1980s, pharmacy benefit carve-outs (PBMs) have been the subject of vigorous debate. Most recently, these controversies typically focused on the impact of PBMs on drug spending, such as the pricing models used by PBMs and the kinds of data transparency that employers might need to negotiate with them effectively.
Related: Have integrated health benefits reached a tipping point?
Researchers took a different approach to evaluating the impact of pharmacy carve-outs relative to integrated benefits. They considered whether outside contracting for a subset of health care services would lead to an inefficient provision of care and, consequently, increased costs outside prescription drug expenditures.
“After matching patients on demographics, health status and a variety of health insurance benefit characteristics, we found that, overall, Blue Cross and Blue Shield of Louisiana members covered by an integrated pharmacy benefit did not experience significantly different levels of medical spending or trends in spending growth compared with members covered by a pharmacy benefit carve-out,” researchers said.
“However, when we restricted our analysis to members with selected chronic illnesses, we found significant reductions in medical spending growth among those with an integrated pharmacy benefit. These benefits appeared to materialize over time, with no significant differences in the first comparison year but significant differences in the second and third year of post-match follow-up.”
These results suggest that, although the cost of contracting for prescription drug benefits is an important topic for employers, brokers, government leaders, policymakers and other stakeholders, the effect of benefit design on “whole-person” care, not just the services delegated to a carve-out, also must be considered — particularly for patients with chronic medical conditions.
Researchers noted three takeaway points:
- Integrated pharmacy benefits are associated with reduced medical expenditures over the long term, resulting in annual per-member, per-month savings compared with a carve-out.
- These savings are observable in the population as a whole but are more pronounced for patients with chronic illnesses.
- Any potential savings on drug spending promised by a pharmacy benefits carve-out should be weighed against potential increases in medical spending.
“Members with chronic illnesses receiving an integrated pharmacy benefit experienced slower medical cost growth compared with members covered by a pharmacy carve-out,” the study concluded. “Group leaders and brokers should consider the additional cost savings achieved by integrated pharmacy benefits when comparing the total costs of carve-in vs carve-out prescription drug programs.”
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