Data from Mercer shows that specialty medications — high-cost drugs used to treat complex, chronic conditions such as cancer — account for only 2% of utilization but a staggering 48% of pharmacy spending.
With this in mind, Captive Resources’ Kelly Garrett discussed alternative prescription drug sourcing and cost containment solutions employers can utilize to reduce pharmacy spending in our recent Health Risk Management webinar.
Continue reading for a recap of the presentation.
To combat rising drug prices, a variety of drug sourcing and cost containment solutions have emerged as alternative options.
While there are additional cost containment options available to employers, Garret focused on three solutions throughout the webinar:
These financial assistance programs are sponsored by pharmaceutical manufacturers or charitable organizations and are generally for low-income individuals who are underinsured or uninsured. MAP/PAP programs cover the full cost of the drug for both the patient and the plan sponsor.
These programs take advantage of other countries’ single-payer healthcare systems, often offering substantial reductions in U.S. retail prices.
This is a unique program that involves sourcing specific drugs from 340b pharmacies, typically community and/or rural hospitals, that can purchase medications at a discounted price and resell them with a slight markup.
During the webinar, Garrett provided a general overview of four steps used by MAP, PAP, and international drug sourcing programs.
To utilize drug sourcing programs, the plan is set up to exclude specialty drugs, with specific language added in as needed.
If an employee needs a prescription that has been carved out of the plan, they will be denied and referred to the employer’s vendor program.
Some vendors may contact members with outbound calls to help them engage in the program. In the following section, we’ll discuss what to look for when selecting a vendor.
When the employee gets in touch with the vendor, the vendor will collect any necessary information, such as household income for MAP and PAP programs and driver's licenses or passports for international sourcing programs.
If a member meets the income and coverage requirements for MAP and PAP programs, the drug will be sourced free of charge to the member and health plan.
If a drug is available internationally, it will be sourced and shipped to the member.
Garrett presented several questions self-funded employers should consider asking when choosing a vendor to partner with:
According to Garrett, regulatory guidance should be contemplated when considering drug-sourcing programs. Employers should seek appropriate counsel to ensure they are utilizing these programs correctly.
For more details on compliance information discussed in the webinar, please contact our team.
This presentation was part of Captive Resources’ Medical Stop Loss Webinar Series — regular installments of webinars to educate medical stop loss group captive members. The thoughts and opinions expressed in these webinars are those of the presenters and do not necessarily reflect Captive Resources’ positions on any of the above topics.
