Regain control of drug spend in 2022: 3 pharmacy benefits trends to watch

As we near the end of the second pandemic year, the desire for quality and affordable health care has never been more top of mind.

The pandemic raised new concerns about medication access and supply, both of which drove utilization and costs upward. Centers for Medicare & Medicaid Services (CMS) projects prescription spend for commercial plans will grow an average of 5% annually, meanwhile, plan sponsors continue to battle budget pressures and ambiguity over their spend. And the benefit needs of member populations have changed because of the pandemic, once again putting pharmacy benefits under the microscope for 2022.

Plan sponsors face yet another unpredictable year ahead. In an environment where health care challenges continually evolve, new opportunities emerge for plan sponsors to strategically invest in their relationships with pharmacy benefit management (PBM) partners. Here are three pharmacy benefits trends that plan sponsors should consider when making their benefits decisions for 2022:

1. Traditional spread pricing models are obsolete

Employers increasingly want alternatives to the rebate-driven approach and demand more transparency as they realize some rebates are actually driving their costs up. More plan sponsors are considering alternative PBMs that offer a lowest-net-cost approach that includes a more affordable yet clinically effective drug mix, including generics and less expensive brands. This approach allows for substantial rebates without the added costs, and an overall lower net-cost.

With rigid contracts and less flexible plan designs to meet PBM spread pricing goals, the traditional pharmacy benefits model does not prioritize plan sponsors’ needs. As benefits professionals look for ways to reduce costs and better manage expenses in today’s uncertain environment, having a transparent and pass-through PBM that is committed to making prescriptions more affordable for plan sponsors and members is essential.

2. Preventing fraud, waste and abuse will drive down pharmacy spend

The U.S. health care system loses tens of billions of dollars every year to fraud, waste and abuse (FWA). A large portion of those costs are attributed to pharmacy spend, including duplicate claims, data entry errors, forged prescriptions and intentional overcharging. Plans sponsors can work with PBMs to protect themselves from risks while improving health care performance, financial results and member safety.

New paths for committing FWA appeared during the pandemic because of policy and regulation changes, such as expanded access to telehealth and waived prescription refill limits, which increased plan sponsors’ need for a holistic FWA program from their PBM partner. Working with a vigilant PBM who puts data analytics to work and implements a tailored solution for plan sponsors can yield the greatest opportunity for avoidance and rapid intervention. Implementing a holistic FWA program will ultimately lower unnecessary costs and effectively manage fraudulent, wasteful and abusive behavior.

3. Managing specialty drug costs will be a top priority

With specialty pharmacy’s skyrocketing growth, it’s a bigger slice of drug spend. According to the Pharmaceutical Care Management Association (PCMA), over the next ten years, PBMs and specialty pharmacies will save payers and patients an estimated $250 billion on the cost of specialty medications and related non-drug medical costs.

Plan sponsors can work more closely with their PBMs to leverage management tools, including benefit designs and alternative funding for costs savings related to their medical or pharmacy benefit, to improve the quality and continuity of care while also reducing overall costs.

Plan sponsors’ investment in PBM partners is crucial to achieving cost savings, superior clinical care and peace of mind. To move confidently into the year ahead, plan sponsors can maximize their pharmacy benefit plan performance to regain control of their drug spend and get the results they are looking for.