74 HR Magazine June/July 2017
treated. However, it is important to make sure this structure does
not become too cumbersome. “Don’t make it too confusing with
multiple tiers,” advises Gary Kushner, president of Kushner &
Co., an HR and benefits consulting firm in Portage, Mich.
As specialty drugs become more common in all therapy
classes, you may be tempted to ask employees to foot a greater
portion of the bills for them—perhaps by introducing co-insurance that requires workers to pay a percentage of the prescription
cost rather than a flat dollar co-payment.
But that approach could backfire, experts say. If you pass
along those costs, people are less likely to adhere to the prescribed
regimen, says Tom Sondergeld, vice president of global benefits
and mobility for Walgreens Boots Alliance in Deerfield, Ill. “In
those cases, you don’t get the right result,” he explains. Moreover, if the patient’s condition worsens, costs could snowball—
and some expenses will likely spill over into the medical plan if
additional treatment or hospitalization is required.
When developing the formulary of what drugs the plan will
cover, you’ll need to make some difficult choices. For example,
should the plan cover a prescription for human growth hormone
for a child whose height is in the 15th percentile for his or her
age? “This treatment can cost $12,000 to $15,000 per month
for a condition that is not life-threatening,” Kushner says. “It is
difficult to know where to draw the line.”
Traditional pharmaceuticals usually come in the form of a pill,
capsule or liquid that is prescribed by a health care provider and
that, for the most part, can be taken with little supervision beyond
providing basic instructions and information about potential side
effects. Specialty pharmaceuticals, on the other hand, are more
complicated. They are commonly given via infusions and injections, which can be tricky to administer and may require professional support. Moreover, appropriate follow-up care is needed
to determine the drug’s effectiveness and whether the person taking it can adhere to the regimen without experiencing debilitating
A person’s inability to tolerate a specific medication is a real
Keep Tabs on the Plan
concern and could be a significant source of waste. That is why
the quantities of drugs dispensed should be carefully managed,
particularly when someone is filling a prescription for the first
time. Work with vendors to reduce the initial order from a 90-day
supply to, say, 30 days to minimize expenses in case the medica-
tion must be discontinued.
“There is no use paying for a large supply of medication if the
patient can’t tolerate it,” says Raymond Brown, clinical pharmacy
leader in Mercer’s Minneapolis office.
Disease management programs can also help steer people to the
least costly site to receive specialty drugs. Some providers might
want to administer the medication in a hospital setting; a physi-
cian’s office or retail clinic might be just as safe and effective but
much less expensive.
Close management of prescription plans and PBMs is essential.
“Manage them tightly, insist on regular reporting, ask questions
and don’t trust everything the PBM is telling you,” Sondergeld says.
For example, know how manufacturer rebates work. In some cases,
these refunds actually drive costs
because PBMs push higher utilization of certain products over others to maximize rebates.
When reviewing plan data
in aggregate, check for outliers.
“You should look for sudden
increases in costs for a drug, as
well as in the number of prescriptions being filled,” Bruhnsen
says. If you spot something worrisome, you may be able to move alternative drugs to preferred
status to encourage their use instead of the higher-cost drug. In
addition, modifying utilization criteria can limit the situations
in which the expensive drug will be covered. When you’re making these types of changes to formularies, it is a good idea to give
patients and providers 60 days’ notice so that they can prepare
to change to a new drug. This review can also highlight opportunities to steer people toward buying a medication through a
lower-cost channel, such as a mail-order or specialty pharmacy
rather than a retail chain.
Rework Contracts Regularly
In the ever-changing pharmacy environment, long-term con-
tracts with PBMs and other vendors are not always in employ-
ers’ best interest. “Don’t let vendors push for contracts longer
than three to five years,” Sondergeld says. “You also need the
ability to check prices against the market, and the contract might
An even shorter cycle might be warranted for PBM contracts.
Bruhnsen recommends a maximum of t wo to three years. “That is
critical to get the best discounts,” he says. “The longer a PBM can
lock you into an agreement, the more that is to their advantage.”
For example, if manufacturers increase their rebates or if retail or
specialty pharmacy networks offer better discounts, a long-term
contract with set conditions may preclude a plan sponsor from
sharing those savings. “Keeping those cycles shorter helps to make
sure you are getting the most current pricing,” Bruhnsen says.
‘ The longer a PBM can lock you into
an agreement, the more that is to
– Keith Bruhnsen, University of Michigan