Employers Saw More Pharma Options for 2019

From RADAR on Drug Benefits

Amid still-escalating costs, large employers figuring out their pharma strategies and benefit designs for 2019 and beyond continue to have heightened concern about specialty pharmacy spend, industry experts say. But this year there is more uncertainty as companies make decisions against the complex backdrop of pending megadeals involving some of the largest U.S. PBMs and insurers.

Ashraf Shehata, a principal in KPMG's health care life sciences advisory practice, says that strategies generally remain much the same as a year ago for major companies approaching the market.

"Employers are stepping into innovation," he adds. "Clearly, continued utilization of [accountable care organization] is expected to accelerate, so pricing the model around ACOs could give additional value."

Shehata also points out that a tight U.S. labor market is forcing companies to be aggressive with health benefits to stay competitive. In terms of benefit design, employers are working more to manage the cost of specialty pharmaceuticals through site of care management tactics.

There is also the ongoing issue of whether to integrate pharmacy and medical benefits. "At a minimum, the carrier will come back with all kinds of options to integrate medical and pharmacy solutions and leverage the premium dollar.…So, it should be a very attractive time for employers to reconsider the pharmacy trend," he says.

New models are expected to emerge from industry megadeals. While employer coalitions are looking at the market more aggressively in terms of pricing and better unit costs, private exchanges in this space could be very pivotal. Moreover, Blue Cross and Blue Shield plans have different models in place and may begin to leverage a national PBM and BlueCard program in the next few years.

As the Trump administration released the final rule on association health plans — and as AHPs begin to emerge — employers of all sizes should get preferred pharmacy pricing models, not just large employers as was the case previously, Shehata says.

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