The Invisible Drain on Your Pharmacy Benefit Budget

For most employers, their pharmacy benefit represents one of the largest line items in their health plan budget. Yet far too many are unknowingly overpaying for medications that provide no additional clinical value. The culprit? So-called "junk medications" that have cheaper therapeutic equivalents.

What are Junk Medications?

Junk meds are higher-cost brand name drugs that have low-cost generic or alternative brand counterparts that are therapeutically equivalent. This means the drugs have the same clinical ingredients, dosage, administration, and outcomes. They are essentially duplicate medications at wildly different costs.

Some common examples of junk meds are Novolog (when human insulin is available), Duexis (ibuprofen + famotidine), Humalog, Jublia, Nexium 40mg, and Dexilant. An employer's formulary loaded with these types of medications is an overspending trap.

How Junk Meds End Up on Formularies

So why do these wasteful, overpriced drugs appear on so many employer formularies? In a word: rebates. Drug manufacturers provide large rebates and incentives to pharmacy benefit managers (PBMs) to favor their brand medications over cheaper alternatives.

PBMs earn revenue in different ways, including retaining a portion of rebate dollars from manufacturers. This rebate system creates incentives for PBMs to exclude low-cost generics and therapeutically-equivalent alternatives from formularies. The result is employees getting steered toward higher-cost medications that provide no better care.

Most Employers Are Unaware

Due to lack of transparency from PBMs around rebate practices and the arcane nature of drug pricing, most employers are simply unaware that they are overpaying for suboptimal, redundant medications. PBMs have a vested interest in obscuring these inefficiencies to preserve their rebate revenue.

Employers reasonably assume if a drug is on their PBM's formulary, it has been vetted for maximum cost versus clinical efficacy. Unfortunately, this trust is frequently violated as PBMs value rebates over their clients' financial interests.

Eliminating Junk Medications for Good

To stop junk medications from draining pharmacy budgets, employers need a new PBM model that operates with complete alignment as a fiduciary to the plan sponsor's economic interests.

DisclosedRx operates under a contractual fiduciary obligation to put employers' financial interests first. We build formularies from an unbiased, evidence-based review to identify all possible therapeutic equivalencies and lower-cost alternatives.

Our Plan Defense program ensures junk meds are systematically blocked from the formulary. Employers gain a tailored, waste-free formulary and stop overpaying for medications providing no additional clinical value.

With Full Disclosure around ALL incentives and a fiduciary duty to minimize costs, we empower employers to maximize their pharmacy benefit budgets. Employers can have faith their formulary contains only the most clinically-valuable and cost-effective medications.