Your Plan Can ​Decrease Its  Prescription Coverage Costs (But You Need To Take Action To Do So)

We’re thrilled to report yet again that the National Prescription Coverage Coalition has achieved striking savings for our Coalition Members.

Based on year-end analyses, our Coalition Members decreased their prescription coverage costs by approximately 20% to 30%.

Sound too good to be true?

It’s not. These savings resulted from our Coalition Members implementing dozens of ongoing recommendations provided by our Coalition experts, such as:

  • Excluding coverage for numerous high-cost drugs that can be appropriately replaced with inexpensive over-the-counter drugs or low-cost prescription generics
  • Updating and improving their customized Formularies
  • Implementing customized Prior Authorization protocols drafted by our Coalition experts
  • Taking advantage of Specialty Drug coupons not only to offset Plan Beneficiaries’ costs but also to reduce Plans’ costs
  • Improving Benefit Plan Designs to incentivize beneficiaries to pay attention to drug costs

Our Coalition experts also continuously monitored:

  • Brand drugs that lost their patent protection, and recommended the immediate replacement of all such drugs with lower-cost generics
  • Marketplace changes in the prices of all drugs, and recommended specific actions in connection with certain drugs whose costs increased dramatically
  • The FDA’s approval of all new-to-market drugs, and recommended the exclusion of all copy-cat and other drugs that provide little new value but carry high prices

We also note that all our recommendations were implemented with the cooperation – and extensive work effort – of Envision, the PBM that was selected by the Coalition after a nine month RFP conducted by our firm.

Here’s an example of the cost decreases achieved by one Coalition Member after it implemented a host of recommendations on January 1, 2017:

As an example of the ongoing savings we achieve: Another Coalition Member joined our Coalition in April 2015 and obtained immediate savings. Given our ongoing recommendations, costs continued to decrease in 2016, and fell even further in 2017, bringing about the following savings when compared with the entity’s costs under its previous PBM:
Thus, given our ongoing and continuous recommendations this Coalition Member’s costs continuously decreased. And almost three years after joining our Coalition, this Coalition Member’s costs were far lower than before it joined our Coalition.

Because this Coalition Member was located in a metropolitan area, we also knew it could achieve savings by eliminating one of the two high-cost retail pharmacy chains – CVS or Walgreens – and getting stronger discounts from the other chain.

Working with Envision, we determined the chain pharmacy that would provide the greatest discounts if the other chain was excluded, verified that all plan beneficiaries would still have strong access to retail pharmacies within a few miles of their homes, and created a customized Limited Pharmacy Network for this Coalition Member.

The Experience of Other Plans

In contrast to the decreased costs of our Coalition Members, last year virtually all other Plans in the nation experienced increased prescription coverage costs. In fact, according to one analysis, prescription coverage costs increased on average for those under age 65 by 11.6 percent, and for those 65 and older by 9.9 percent.

Thus, while our Coalition Members’ costs were decreasing by 20% to 30%, other Plans’ costs were increasing by 10% or more.

Why the difference?

  • Most Plans have PBM contracts in place that are stuffed with loopholes that allow PBMs to charge essentially whatever they want for many drugs. Our Coalition contract is free of all loopholes.
  • Under most Plan’s PBM contracts, PBMs can retain a large portion of the monies they collect from manufacturers, as long as the PBMs label the monies with names other than “Rebates”. Under our Coalition contract, all third party monies must be passed through to our Coalition Members.
  • Most Plans rely on their PBMs’ “standard” Formularies and “standard” Prior Authorization and “standard” Step Therapy Programs, notwithstanding PBMs’ conflicts of interest and secret relationships with manufacturers. Under our Coalition contract, we have the right to individually customize each Coalition Member’s Formulary and Programs, and Envision works with us to do so.
  • Most Plans are without the resources to pay any attention – let alone respond – to marketplace changes, such as dramatic drug price increases, brand drugs that lose their patents, and new high-cost drugs that are approved by the FDA but offer little in new value. Our Coalition experts provide all these services on an ongoing and continuous basis to every Coalition Member.

If your Plan is relying on another consulting firm – or your Plan is a member of another Coalition – what cost trends have you experienced?

Have you achieved the cost decreases that our Coalition has provided to our Members?

Can Your Plan Continue To Absorb Increased Costs?

Recent government projections reflect prescription costs will increase by 6.3 percent annually through 2026. Several actuarial firms project mid- to steep increases for prescription coverage this coming year and beyond.

If your Plan can’t absorb ever-increasing prescription coverage costs, we urge you to consider joining the National Prescription Coverage Coalition.

We have a proven track record that demonstrates we can – and will – decrease your Plan’s costs, and sustain lower costs for your Plan over time.

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