Practical Strategies for Containing Pharmacy Costs

Weight Loss Drugs All the Rage

Various weight loss drugs have been around for years delivering limited success in sustainable weight loss. The advent of new drugs on the market such as Ozempic (semaglutide) and Mounjaro (tirzepatide), two type 2 diabetes drugs, have been game-changing when it comes to weight loss as they are very effective as compared with these older treatments—the clinical merit for these drugs is much different. Semaglutide is available as Wegovy for the treatment of obesity, and Mounjaro is awaiting FDA review and approval for obesity. However, weight loss drugs traditionally have been benefit exclusions for many plans. The challenge for plan sponsors is establishing appropriate guidelines for how they will pay for these drugs for weight loss. The lines have been blurred in terms of whether the issue being targeted by these drugs – obesity – should be considered a chronic disease requiring chronic treatment and therefore included in the pharmacy benefit or whether it should be considered a lifestyle drug as previously thought. And if it is considered a treatment for chronic weight management, what other controls need to be put into place to assure that plan sponsors are appropriately managing this condition? This is a struggle that many plan sponsors are facing and one with potentially far-reaching financial consequences. Either way, it is important to have a position on weight loss drugs and equally important a plan to sustain the costs should they be considered for coverage.

As the job market tightens up and the tide shifts for employers, potentially desirable employees may make employment decisions based on the pharmacy benefit. And that could include looking at whether weight loss medications are included as part of that pharmacy benefit. With obesity levels continuing to rise, it is important to assess the pros and cons of covering weight loss medicines to figure out if the cost burden can be met to manage obesity as a chronic condition.

Cell and Gene Therapy Development Rising

Life-saving treatments in the form of cell and gene therapies have grown rapidly over the last decade, with explosive growth expected through 2026. These treatments come at a very high cost with some in the millions of dollars per treatment. Plan sponsors need to be prepared for what’s in the pipeline and be aware of available cost-containment strategies. While the number of patients that might benefit from these treatments is relatively low in terms of the overall population, these therapies will be a pharmacy spend driver due to their extreme cost. And while this cost has employers concerned, weight loss drugs will be much more impactful on spend and trend.

With increased cost challenges when it comes to drug coverage, plan sponsors are always in search of alternative sources of savings. Both plan sponsors and patients can potentially benefit from alternative funding and copay assistance programs. Alternative funding has come under fire lately as a very controversial topic, as it includes carving out some specialty drugs and then using a vendor or other means to seek financial assistance to pay for the drug. These alternate sources can conflict with monies intended for uninsured or financially challenged patients. While this strategy may save money for all parties, it can come at a cost in terms of time delays for the patient in receiving medications during the financial sourcing process. Meanwhile, copay assistance programs have been around for years, with many manufacturers offering reduced or no cost for drugs to patients that qualify and Pharmacy Benefit Managers (PBMs) offering copay maximizer programs to facilitate these cost savings for specialty drugs. While this has allowed patients with high deductibles or co-insurance provisions affordability and access to costly treatments, some manufacturers are now decreasing or discontinuing this type of assistance for members who have enrolled in copay maximizer programs.

Can plan sponsors save money by importing drugs? There is no question that pharmaceutical costs outside of the U.S. can be significantly lower. And while this can be alluring in terms of the potential savings, it does come at significant risk. Without FDA approval, there is no way to guarantee the safety or efficacy of these drugs. Importation brings the additional risks of quality control during shipment and the lack of ability to control the timing. And while there could be upfront savings, they may not be realized by the actual consumer – the patient.

Plan sponsors can explore other cost-saving avenues within their Pharmacy Benefit Management (PBM) contract. A contract that is flexible in terms of vendor management favors the plan sponsor and maximizes the return on the pharmacy investment. An extension of this flexibility and where the true value can be realized is with program optimization. Keeping an eye on the program in terms of fraud, waste, and abuse through predictive analytics, as well as specialty drug management and contract audits, can save plan sponsors large percentages of their pharmacy benefit budget. In addition, monitoring non-essential drug spending can remove expensive formulations that offer little or no clinical value over lower-cost alternatives.