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April 16, 2019
Blog by Jim Harenberg, Apex Benefits VP of Strategic Solutions
In recent public commentary, Todd Rokita (Apex Benefits’ general counsel and vice president of external affairs; Responsible parties must own their role in sky-high drug prices; IBJ.com; April 5, 2019) and Alex Azar (Secretary, U.S. Department of Health & Human Services; Remarks to the National Business Group on Health; April 11, 2019), agree that pharmaceutical manufacturers and pharmacy benefit managers have created a self-serving system that needs to be transformed.
In Mr. Azar’s words, the system “has operated in the shadows, serving entrenched interests: drug companies who set these prices so high, and the pharmacy benefit managers who receive tens of billions of dollars in rebates without patients, or the employers who pay a big chunk of the bill, never knowing where the money goes.” Azar and Rokita also agree that the U.S. government is taking a first mover position on policies to create positive change which will, in Rokita’s words, “have a positive ripple effect on the employer-provided private-insurance market, the source of most prescriptions.”
Here’s the question for employers, particularly self-funded employers: Are you ready to lead change – to be a first mover and drive real transformation?
If you aren’t ready to lead, are you at least prepared to be a fast follower of the changes being introduced across the healthcare industry to benefit your employees and your companies? Secretary Azar noted that “private-sector employers provide health insurance for 180 million Americans – more than Medicare and Medicaid combined, and more than half of all Americans.”
It’s easy to take action:
- Educate yourself. While the medication pricing and distribution system is murky, it can be understood. Ask questions. If you have a contract in place with a pharmacy benefit manager (PBM), ensure they separate the price you pay for their services from the cost of medications. If you utilize a high-deductible or consumer-directed health plan design, consider options to ensure the employee benefits from negotiated rebates and point-of-sale rebates. Don’t accept opaque answers. You wouldn’t enter a contract with any other supplier without understanding the cost you’re paying for their services. So why should your PBM supplier be different?
- Find an advocate. I was recently asked why an employer needed Apex Benefits to help negotiate better contracts and lower their pharmacy costs. It’s quite simple. Any individual employer will negotiate pharmacy terms once a year or every few years. In serving our employer clients, we negotiate pharmacy terms on a daily basis. We’ve uncovered the ways PBMs mask revenue from pharmaceutical companies to avoid passing it to employers and their employees. We know how to close the loopholes.
- Lead. Be a leader for your employees. Be a leader among your peers. Join with other business owners and executives to create greater transparency, reduce costs and improve quality outcomes in our healthcare system.
In his April 11 remarks, Azar concluded that “change is coming to prescription drug markets.” Similarly, Rokita noted that “real value for employers will be found if they … disrupt the status quo, and fight for themselves and their employees.” I agree. Whether as a first mover or fast follower, employers have the opportunity to lead positive, transformative change.
At Apex Benefits, our team of Certified Pharmacy Benefits Specialists routinely save clients 20 to 30 percent annually on their pharmacy costs – without requiring benefit design changes. Please contact me at email@example.com or firstname.lastname@example.org to learn the facts about pharmacy benefits and how you can substantially reduce pharmacy costs today.