Published December 2020
Cost is still the #1 concern for consumers when it comes to health care, and this worry extends to prescriptions too. Nearly 30% of Americans report avoiding refills and not taking medication properly because of cost, and drug prices are not improving. It’s estimated that retail drug spending growth alone could go up 6% in the coming years, with 42% of the cost falling on employers.
Here are some solutions policy makers and insurers alike are developing to keep spending under control when it comes to the cost of medications:
Drug transparency tool
Many health insurance companies and pharmacies are developing procedures and creating tools so that consumers can make informed decisions and avoid unnecessary spending (such as selecting a name-brand medication when a generic would be appropriate). This transparency is also encouraging drug manufacturers to lower prices to stay competitive.
Rethinking formularies
While medication spending is often associated with more serious conditions and drugs, it applies to over-the-counter (OTC) medications as well. Some payors are reimagining their formulary structures to cover standard, generic medications—helping consumers save on everyday costs. Starting in 2021, Harvard Pilgrim will offer a new special formulary that has Tier 1 drug coverage for certain OTC medications, for treating common conditions like allergies, coughs, colds, pain and inflammation. This could lead to potential price savings for members on medications they frequently use.
Preventative care to aid future chronic conditions
Specialty drugs are used by only 2% of the U.S. population, but these drugs accounted for 47.7% of total drug spending in 2019. While there are many specific legislative and payer-driven initiatives to reduce pharmaceutical costs, health care leaders are also encouraging preventative medicine, particularly during COVID-19, to reduce the need for more serious medications in the future associated with chronic conditions.
This article first appeared as featured content in Harvard Pilgrim’s HaPi Guide newsletter on December 2, 2020. To stay up-to-date on the latest healthcare topics such as the future of health care, new ways to be healthy or the business of insurance, sign up to receive our monthly communication:
To confirm eligibility for any programs or services mentioned in this article as it relates to your specific health plan, please reach out to your account executive or HR benefits team. You may also speak to our member services team at (888)-333-4742 or by sending a secure email. And for plan details and other member resources, log in to the member portal.