The fact Americans are living longer – an average of 78.7 years, nine years longer than in 1960 – is attributed to many factors – healthier lifestyles, better access to medical care, and advances in health care practices and medicines.
The use of prescription drug plans has become a staple in the lives of millions of American adults and children.
According to the Centers for Disease Control and Prevention, 49 percent of U.S. residents have used at least one prescription drug in the past 30 days and 23 percent have used three or more prescription drugs. The same survey revealed that more than half of Americans regularly take a prescription medication – four, on average – and it is estimated that in 2019, 4.25 billion retail prescriptions will be filled throughout the United States.
The stark reality is, however, these medicines, many of which are lifesaving, have undergone a meteoric increase in price and have become unaffordable for consumers, even those with insurance.
The Rise of Prescription Drug Use
According to a study conducted by Consumer Reports, the total number of prescriptions filled by both adults and children, increased 85 percent in a 20 year period from 1997-2016. In 1997, 2,416, 064, 220 prescriptions were filled and 2016 4, 468, 929, 929 were filled. The U.S. population over that time only grew 21 percent.
A report published in the journal, Health Affairs, found that the cost of brand-name oral prescription drugs rose more than 9 percent a year from 2008 and 2016, while the annual cost of injectable drugs rose more than 15 percent.
Seeking Multiple Sources for Prescription Drugs
Fifty-three percent of those who take prescription drugs get them from more than one healthcare provider, according to the Consumer Reports National Research Center.
How do companies better manage these spiraling costs without reducing the value of the benefit or passing additional costs to their employees? They turn to Oswald Companies for innovative solutions to maintain the benefit and take care of a company’s most important asset – employees.
“We have tracked the rising costs of prescription programs over the last five plus years and have seen it become a real thorn in the side of our clients and plan sponsors,” says Steffan Moody, vice president/market leader, Central Ohio for Oswald. “Our responsibility to the client is to help them navigate this rocky path with viable, actionable solutions.”
Oswald recently was presented with a daunting challenge by a client that was facing a prescription drug situation that was almost unheard of.
The employed-owned company, which had roughly 250 associates enrolled in the plan, was faced with a single prescription cost of $1.9 million – just short of the company’s entire program spend of $2 million.
“It was a unique situation that called for a bold, non-traditional approach,” says Moody. “It was either do things differently or not offer the plan at all.”
Oswald turned to its diverse internal resources and researched solutions that would allow the company to continue to offer employees a top-notch prescription drug program and take care of the employee in need of the costly but necessary prescription.
What solution did Oswald identify? It created a “carve out” prescription drug program for specialty medications. A pharmacy “carve-out” is when a plan sponsor chooses an independent pharmacy benefit manager (PBM) – one not managed by the contracted insurer — to administer and manage prescription drug benefits separately from the plan.
“A traditional insurance program doesn’t advocate this approach, but we needed an out-of-the-box solution that allowed our client not to be at the mercy of the insurance program and their prescription manager,” says Moody. “We had to identify a resolution that would provide member assistance without burdening the plan to pay for it.”
With the “carve out” in place, the employee was connected to a prescription drug advocate whose job is to identify alternate paths to secure specialized prescriptions. Oswald has built an extensive network of specialized service providers – like prescription drug advocates – that can be used to assist clients and their employees when unique healthcare situations arise.
The result was the employee was able to obtain the prescription and the company realized a 30 percent reduction in its overall healthcare spend by deploying the “carve out.” The specialty medication program was then made available to all employees.
“In this instance we had to be reactive and it taught us a valuable lesson on using a proactive approach with our clients,” says Moody. “We are having specific conversations with clients and using data analytics to identify needs and bring actionable solutions to the table.”
(Sources: cdc.gov, statista.com, consumerreports.org, healthaffairs.org)
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