Millions of people depend on prescriptions drugs, at a price they can afford, in order to stay healthy. Yet the prescription market today is highly volatile, marked by an unprecedented level of drug price increases and a stream of new, expensive specialty drugs. The high cost of prescription medicines hurts everyone—from payers to patients.
According to AARP’s Rx Price Watch Report released in February, the average cost for a year's supply of a prescription drug for older Americans doubled over a seven-year period, totaling more than $11,000 in 2013. And an August poll by the Kaiser Family Foundation found 24 percent of Americans said it was difficult to pay for their medicines. For patients in poor health, that number rose to 43 percent.
Pharmacy benefit managers (PBM)—organizations that administer pharmacy benefits on behalf of employers, health plans and government agencies—are a key health care player that are integral in addressing the rising cost of drugs. In fact, CVS Caremark, the PBM of CVS Health, recently reported that proactive pharmacy management solutions, such as aggressive negotiations with drug manufacturers, thoughtful formulary design and clinically-based utilization management programs, helped to mitigate impact of growth in prescription drug costs in 2015.
As detailed in CVS Health’s 2015 drug trend data, prescription spending per member per month for CVS Health’s PBM clients dropped dramatically to five percent in 2015 from a high of 11.8 percent in 2014. Trend calculations take into account the effects of drug price, drug utilization and the mix of branded versus generic drugs, as well as the positive effect of negotiated rebates on overall trend. While this is just one example of successfully mitigating the impact of rising drug costs, it underscores the role of PBMs in helping patients access the medications they need at a price they can afford.
PBM-driven efforts can also encourage people to take their medicines, which helps patients be healthier and saves our health care system money, given medication non-adherence costs us $300 billion each year. In fact, research from the CVS Health Research Institute shows that cost-saving PBM strategies—mail delivery of drugs for chronic conditions, promoting generic utilization and automatic refill programs—also can help boost medication adherence and improve patient health.