Managing Rising Prescription Drug Costs in the Staffing and PEO Industries

In this edition of the Staffing Playbook, we are going to tackle the ever-evolving landscape of employee benefits, rising prescription drug costs continue to be a pressing concern for employers across the staffing and PEO industries. With employer health care costs expected to increase by 6.6% in 2024, and the average price of prescription drugs on the rise, it’s crucial for organizations to understand the implications and explore strategies to mitigate these challenges.

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Understanding the Impact of Rising Prescription Drug Costs:

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As the price of prescription drugs continues to climb, employers and employees alike are feeling the financial strain. With one in three Americans struggling to afford their medications, the impact is significant.

Factors contributing to premium increases include:

• Catastrophic Claims: Cancer, traumatic brain injuries, amputations, premature births
• Medical Provider Costs: Rising costs of hospital visits and other inflationary impacts
• Specialty or costly prescription drugs: GLP-1 and other weight loss drugs along with other "specialty-pharma" drugs are contributing to 50% of your prescription spending.

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Challenges Faced by Employers and Employees:

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The repercussions of rising prescription drug costs extend beyond financial strain. Employees are experiencing strained budgets, stress, and absent-mindedness as they struggle to afford their medications. For employers, high health insurance premiums, increased cost-sharing, and challenges in retention and recruitment are major concerns.

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Comparing Drug Rate Increases to Overall Health Care Costs:

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The rate of prescription drug cost increases outpaces that of general health benefits, growing at a steady rate of 6.8%. Specialty drugs, in particular, are a dominant force against companies’ bottom lines, accounting for over 50% of employers’ total prescription spending. Technological advances, government regulations, and disease prevalence contribute to this growth, making it essential for employers to address the issue proactively.

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Strategies for Reducing Prescription Drug Spending:

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While employers may not be able to control pharmaceutical prices, there are strategies they can implement to mitigate rising prescription drug costs.

These include educating employees on the health care system, limiting the use of restrictions, researching alternative medications, and seeking advice from industry experts.

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Take Control of Your Company’s Health Care Costs:

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Do not try and do this on your own. Find the right broker partner that aligns with your financial goals and corporate culture to navigate the complexities of rising prescription drug costs to develop strategies to enhance your health care strategies. Industry professionals can provide valuable insights and assistance tailored to your organization’s unique needs.

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As always, if you have any questions please feel free to reach out to me: [email protected] or m: 770-654-8666