One of the employee benefit trends that businesses will need to tackle in 2018 is the continuing struggle to control medication costs. The use of specialty medications continues to drive spending on medicine upward.
It can be hard enough for small- to mid-sized companies to offer health benefits without the need for aggressive administration to keep costs in check. That’s where outsourcing benefits administration to a professional employer organization (PEO) can help.
An article published by the Society for Human Resource Management details the rising expense of specialty drugs to employers:
"Specialty pharmacy is different from other medications in many ways, including having a tendency to be much more expensive—some meds cost in the tens of thousands of dollars per treatment. As a result, we are seeing growing numbers of employers, along with their health plans and pharmacy benefit managers, implementing many [cost-control] techniques."
According to the Pew Charitable Trusts, specialty drugs representing a growing portion of the total drug expenditures in the U.S. with spending on them reaching $121 billion on a net price basis in 2015. A year of treatment with a specialty drug could exceed $100,000 per patient for some chronic conditions.
In 2015, the use of specialty drugs accounted for approximately 38 percent of total drug expenditures in the U.S. despite only being used by 1 to 2 percent of the population. At that time, there were more than 300 specialty drugs available with almost 700 under development.
The rising price of specialty drugs has forced some employers to take more aggressive benefit management steps to control costs. This includes:
The human resources and benefit experts of Progressive Employer Management Company (PEMCO) have extensive experience in benefits administration. Our professionals can not only help you with managing employee benefits, but PEMCO’s purchasing power can give your company access to health plans with more competitive premiums. Contact us for assistance.