The prescription provisions of the IRA are set to begin taking effect in 2023 through a phased-in approach. But there are five steps benefits professionals can take now to help offset the burden of any potential increases:

Demand transparency from your Pharmacy Benefits Manager (PBM). PBMs are supposed to function as a consultant to optimize plan efficiency and costs. But many turn a huge profit by pocketing drug rebates, which creates an incentive for them to keep higher-cost drugs on the formulary. Meanwhile, many PBMs also engage in spread pricing with the PBM again pocketing the markup. Talk with your PBM to understand the terms of their service, negotiate the details related to what portion of rebates get passed on to you as the plan sponsor, and insist that they either eliminate or minimize spread pricing.

Work with your PBM to understand pricing data. As the plan sponsor, you should own your own data, or at least have access to it through the agreement with your PBM. And your PBM should work with you to analyze and understand the data and look for opportunities. For example, the PBM should help you identify where the highest plan costs are coming from and ways to minimize those costs while optimizing utilization. In this case, you could establish rules that automatically request to substitute a lower-cost alternative drug with the same or better outcomes.

Educate employees about how prescription pricing works. One of the most important things we can do to lower the cost of drugs for everyone is to shed light on the complexities of drug pricing. Educating employees on why drugs are so expensive, why some are more costly, and most importantly, how to ask for appropriate, lower-cost alternatives will empower them to navigate the system. For example, employees may not be aware that paying out-of-pocket in cash could cost them less than using their benefits, particularly if they have a high deductible health plan. And many may not know they can follow-up with their doctor to inquire about lower-cost alternatives, rather than just biting the bullet at the cash register.

Incentivize better health through wellness programs. One of the best ways to lower the cost of prescription drugs is to reduce the need for them. Offering wellness benefits such as healthy eating programs, exercise incentives, and mental health support can help reduce some of the chronic conditions that drive high drug utilization, such as hypertension, obesity, heart disease, diabetes, and mental illness. Providing employees with the resources and incentives to take better care of themselves can go a long way toward reducing the cost of medical care and prescription drug needs.

Give employees tools to empower more informed choices. Making employees aware of drug price complexity and alternative options is part of the solution — but giving them tools to understanding pricing options on their own empowers them to take control of their prescription experience. Consider adding a prescription management and transparency app to your benefits offering that provides detail on the cost of prescription drugs at the moment their provider prescribes them. Our recent study finds 73% of patients would be more likely to talk to their doctor about lower-cost alternatives if they knew the price in advance. Providing your employees with pricing information and choices helps them know what to expect before they visit the pharmacy counter, reducing the risk they'll abandon prescriptions at the point of purchase and get the vital drugs they need to maintain the best possible health.

Instant Insights /

IRA means increased drug prices for commercial plans: Ways to prepare

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