Employers Take Aim to Curb High Cost of Pharmacy Benefits

December 22, 2015

The cost of pharmacy benefits has continued to rise and has increasingly become the focus of employers looking to manage medical benefit costs. Although pharmacy represented approximately 20% of employer-sponsored medical benefits costs this year, its cost is increasing and will account for 50% of medical cost inflation going forward.

This data comes from the 20th Annual Towers Watson/NBGH Best Practices in Health Care Employer Survey of 487 large U.S. employers.

Eric Michael, the Towers Watson U.S. central division pharmacy leader, specifically highlights specialty pharmacy as a reason for greater spending. “The price, utilization and delivery of specialty prescription drugs, many of which require special handling or delivery, are a top pain point for employers,” said Michael. “Frustrated by their lack of success in controlling these growing costs, employers are beginning to consider new aggressive approaches.”

Currently, more than a quarter (26%) of employers address specialty drug cost and utilization in their medical plan and that number is expected to triple in the next three years. Also, 53% of employers have added new coverage and utilization restrictions for specialty pharma and that will rise to 85 percent by 2018.

As we head into 2016, we will continue to see employers working to rein in pharmacy benefits cost, and putting policies in place to manage especially costly areas such as specialty pharma.

For the full press release, click here.

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