Drug benefit plan trends: Plan sponsors weigh weight management, gene therapy

Health plan sponsors were more liberal in offering a broader range of choices to plan members than were employers, however, sponsors were more likely to shift costs to members than were employers, says a new report.

New pharmacy products and services are flooding the benefits realm. Plan designers and their clients have their hands full determining how best to integrate them into an overall package for plan members. A recent study released by Pharmaceutical Strategies Group offers insight into how these partners are currently choosing what, and what not, to offer their covered members.

Trends in Drug Benefit Design, an annual report by PSG, focuses on trends in access and affordability. The entire report comprises nearly 70 pages of findings and narrative. Topics covered range widely. Perhaps the most relevant are comparisons between choices made by employers and by health plans, and their decisions on such topics as cost-sharing, genetic-related solutions, transparency tools, new weight-loss drugs, and how best to manage the design phase.

Following are excerpts from the data, as well as excerpts from an online interview with one of the report authors. “All” refers to the study’s input from small employers, large employers, and health plans.

In general, health plans were more liberal in offering a broader range of choices to plan members than were employers. Employers tended to be more conservative when selecting new products and services for inclusion, except when those products and services offered greater accountability to plan sponsors and shifted more decision-making to plan members. Exceptions surfaced: health plan sponsors were more likely to shift cost to members than were employers.

Related: New weight loss drugs: Social media fuels huge demand, but not all are FDA-approved

High level findings in topics given special emphasis by the report were:

The report covered many pharmacy-related topics in detail. Among findings that stood out:

Cost-sharing: 64% of all participants are considering increasing cost sharing, with copay or coinsurance leading the list at 40% and number of tiers at 22%. The most commonly selected changes under consideration were increasing copay or coinsurance amounts, increasing the number of drug tiers, increasing the deductible, and adding a preferred network. Health plans were more likely than employers to be considering each of these most commonly selected changes, as 35% of health plans were considering increasing the deductible compared to just 17% of employers.

Transparency tools: New ones continue to hit the market.  The survey reports that 63% of respondents promoted cost-sharing transparency tools, “with no notable differences between employers and health plans or by size of employer. This year’s result continues an upward trend in promotion of cost-sharing transparency tools, likely driven by increases in the number of tools available and in education about these tools,” the report states. It found that 85% of those that promote cost-sharing transparency tools report that the tools show the member their actual out of pocket costs based on their specific plan design.

Gene therapy protection plans:  Employers are less likely than health plans to know about these plans (7% v. 13%), to include them now (5% v. 11%), to say they will not use them at all in the foreseeable future (51% v. 38%).

Digital therapeutics: Only 34% of all surveyed “knew a lot about them.” Among those who had heard of the benefit, 23% reported the plan currently covers these offerings, with another 39% saying they were considering coverage. The largest differential between employers and health plans came when asked if they were definitely considering offering the benefit, with 17% of employers and 30% of health plans answering that they would not.

Plan tier design: The most common tier design was a three-tier design, with four tiers not far behind. There was no significant difference between health plans and employers, although health plans were slightly more likely than employers (35% to 34%) to support four tiers.

Using consultants to assist with design of drug and med benefits: Employers were more aggressive than health plans in using a benefits consultant than were health plans (82% v. 50%); half of health plans said they do not use a consultant.

We asked PSG’s Renee Rayburg, RPh, Vice President, Specialty Clinical Consulting, to comment on the high level findings. Here are her responses via email:

Weight loss medications

Q: With diabetes and other weight-related conditions extracting a huge price in personal health and plan cost, why do you think more than half resist including this in their plans?

 A: Employers recognize the significant benefit of weight loss for members, yet have not fully bought in to the long-term results associated with this new class of weight loss medications. Our clients cite a lack of historical data to demonstrate that these medications lead to sustained weight loss and note that they are indicated to be used as a chronic medication. When considering the cost of these medications coupled with the large numbers of members who would qualify or want them, employers are hesitant to cover these medications and incur significant cost without adequate data. In addition, the long-term side effects are unknown at this point giving employers pause with including them in the benefit plan.

Utilization management programs

Q: What are the UMP designers doing to respond to this low pickup rate?

A: Cost and cumbersomeness are noted as barriers and are a concern but are not impacting pickup rates. Over 90% of plans use prior authorization, quantity limits, and refill too soon limits. Most use step therapy and formulary exclusions, and the majority use mandatory generics programs. Only predictive modeling/member segmentation is used by less than half of respondents (just 23% use these programs).

Gene therapy financial protection products

Q: Does the high awareness factor suggest that this may be included in many more plans within 3-5 years? A: The financial protection products offered on the market today are often limited in terms of what medications are covered while excluding many patients. So far, the market hasn’t offered a solution that makes financial sense for many plans, inclusive of employers and health plans. There is a robust pipeline of new therapies but uncertainty as to which therapies will be approved. A shift we observe with newer gene therapies is that they are increasingly enhanced treatments, but not the only treatment available to patients. There is much education and knowledge needed about the benefits of these newer therapies over existing, less expensive treatments. Questions include: what is the promise of increased clinical efficacy, what are the safety concerns, and what are the administrative concerns. It is a complex process that will need more clarity.

Formulary management

Q: With the survey showing that 53% take steps to identify and reduce wasteful spend in the formulary, please tell us what the most common steps are that have been taken. A: Responses within the survey indicated steps plans are taking align with 4 main themes: blocks or exclusions, utilization management and other PBM programs, reporting from the PBM, and data monitoring and reviews (independent of the PBM).  Benefit leaders want to ensure that the right patients receive the medications that they need while still offering an affordable benefit to employees. They often recognize that there are high cost medications that are not being used optimally within their benefit plans. However, when employers evaluate strategies to identify and reduce wasteful spend, they are often limited due to the risk of a significant reduction in rebates from the PBM. This can be due to misaligned incentives, as plans rely solely upon their PBMs to identify cost-savings opportunities. Plans frequently lack the data and transparency from their vendors to effectively compare the potential loss of rebates versus the value of a lowest net cost strategy. Wasteful spend can also fall under the radar due to low volume although there may be high cost consequences.

Cost sharing

Q: The promotion of cost-sharing transparency tools to help members manage expenses continues to rise. But does it work? Is there any data to show that members are better managing expenses? If so, where are the gains showing up? A: According to Rx Savings Solutions [the sponsor of the study], the increase in promotion of transparency tools correlates to the increasing financial burden shouldered by consumers for their healthcare. A 2021 CoverMyMeds survey reported that 90% of patients took proactive steps to better afford their medications in the past 12 months. However, cost-sharing transparency tools are only part of the equation. And despite being able to better manage expenses, costs continue to rise, offsetting any system-wide gains. By and large, the challenge with consumerism in healthcare has been that patients are poorly equipped with comprehensive information needed to make decisions. Patients need clinical insights as well as financial information that is specific to their plan design to even broach a discussion with their doctor. Far too often, this process is fragmented and doesn’t occur at point-of-prescribing but rather when the patient is at the pharmacy counter finding out they can’t afford the drug their doctor prescribed. While we don’t have data evidence that cost-sharing transparency tools help members better manage expenses, we do hear from our clients those solutions that are integrated with the plan design offer an improved member experience that is more actionable.

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