Employees Facing Higher Prescription Deductibles, Copays

To control spending, opportunities include focusing on treatment adherence

Jane Lutz, executive director of the Pharmacy Benefit Management Institute (PBMI) explains how plan sponsors are changing their benefits..

Jane Lutz, executive director of the Pharmacy Benefit Management Institute (PBMI) explains how plan sponsors are changing their benefits.

Employees are paying more for medications as their plans increase the use of prescription deductibles and copays to manage prescription costs. But opportunities to improve employee health and reduce overall care costs include investing in treatment adherence programs, according to an annual survey.

“The prescription drug industry is becoming more complex, and plan sponsors are looking at their benefits and continuing to implement changes,” said Jane Lutz, the executive director of the Pharmacy Benefit Management Institute (PBMI), the research and education organization that compiled the survey of industry trends.

The report found that more than a third of plans now require beneficiaries to pay a deductible before their prescription medication coverage takes effect, a 157 percent jump from the previous year.

Over a quarter of employer plans are also using a four-tier design for cost-sharing, which typically requires patients to pay an average of 32 percent of the costs of specialty medicines that treat diseases like cancer and HIV. Use of such specialty tier pricing has grown by 250 percent since 2008.

With increased cost-sharing, patients may become less likely to take their medications as prescribed and thus more likely to visit the emergency room or be admitted to hospitals, according to several studies. An upfront investment to reduce cost-sharing could help avoid these problems and actually save money for employers.

Employer Plans Increase Out-of-Pockets

New therapies offer treatment options for many chronic conditions, improving the health of employees and helping to control overall health spending. For example, new curative hepatitis C therapies have driven up prescription spending over the past two years but are projected to reduce U.S. health care spending by $115 billion by 2025. Such treatment options allow patients to live healthy lives and remain productive members of the workforce.

With this in mind, employers should continue to look for new ways to provide their employees with access to an affordable benefit. But Lutz believes that the trend toward more complex cost-sharing strategies will continue over the next decade. “If you look at the drug pipeline that is coming, many of the products coming to market are in the area of specialty,” Lutz said.

While improving treatment adherence could help keep budgets in check without compromising employee health, two-thirds of plans surveyed did not have such programs.

While improving treatment adherence could help keep budgets in check without compromising employee health, two-thirds of plans surveyed did not have such programs. One report found that non-adherence alone costs the U.S. health care system up to $300 billion annually. Mail outreach, pharmacist interaction and outbound live phone calls represent a missed opportunity for most employers to improve the health of their employees and costs of their plans.

One way insurers are suggesting to manage therapy costs is to develop more innovative value-based contracts with manufacturers. For example, insurance agency Cigna has worked out arrangements to pay for two cholesterol-lowering therapies based on how well their members respond to those treatments. So Cigna pays more if these treatments reduce cholesterol levels as well as expected and less if they do not.

“I think we’ll start to see greater focus and interest from the market on the value-based model,” Lutz said.

Beyond value-based contracts and other ideas from insurers, more reasonable cost-sharing strategies and better benefit designs will help ensure patients get the medicines they need and society recognizes the long-term benefits of medical innovation.