With high-profile ERISA lawsuits on the rise, self-insured employers are under pressure to
Employers are able to
"We have seen high-profile lawsuits and plaintiff's attorneys getting very aggressive about trying to recruit employees to these lawsuits, which has put HR professionals in a really tight spot," observes Eric Levin, CEO of Scripta Insights. "The pharmacy benefits market is very opaque and difficult to manage with a complex pricing structure."
Read more:
The thinking behind this program is that arming HR and benefit professionals with Rx analytics from a completely independent source allows them to have a more meaningful discussion with their PBM about saving money. "Next time you're renewing your contract or re-doing your benefit plan design, you're getting one more set of data," he says.
Savings guarantee
Seth Friedman, pharmacy and health plan services leader with Arthur J. Gallagher, has implemented the program for a number of employer clients this year and plans to do so again for the upcoming open-enrollment season.
"The beauty of this model is that they have a savings guarantee in place," he reports, expecting a 5% to 15% reduction from a per-member-per-month standpoint. Any cost reduction will depend on each employer client's drug mix and the percentage of health plan members who actually act on the opportunities that are presented to them.
Read more:
Health plan sponsors find themselves in a very challenging position relative to their fiduciary responsibilities when submitting a request for proposal to partner with a PBM. Nowhere in the cost analysis that benefit advisers conduct on behalf of their clients will it show what the downstream impact is to a patient, Friedman cautions.
"Sometimes there are going to be patients who get caught up in the mix of exactly how those PBM contracts are structured, to where they could ultimately end up paying more for a drug than they might out in the open market," he explains, noting that companies like Scripta help ensure patients have the right information to make an informed decision about where to obtain drugs and how much to pay.
Friedman also points out that a generic-market contract an employer signs can go "haywire" if a PBM charges $500 for a particular drug that costs, say, only $5. As long as the PBM is abiding by the contract, there will be no wrongdoing. The trick is preventing any overcharging in the first place, which is why examining PBM contracts for any loopholes is so vital not only to bending the cost curve but also steering clear of any breaches in fiduciary duty.
"The disparity between the list price and what the prices that the PBM has can be massive," he says. "But if that patient has access to the Scripta tool, they'll be able to figure out where they can ultimately get that drug for that $5 price vs. $500."
Read more:
A core part of Scripta's strategy is to offer a seamless overlay that integrates with a client's existing plan design and formulary, as well as PBM and any other Rx benefit cost-containment effort. "It sits on top of whatever they're already doing, and it's a carrot, not a stick," Levin says. "We just make more options available and help the plan members better understand how to optimize the benefits that they've already been given."
Adds Friedman: "From a fiduciary perspective, we've done our job in terms of giving them everything to get them to a lower-cost alternative."
