Specialty Pharmacy & POP Plans

Employer groups have been faced with some tough choices post pandemic. The cost of specialty pharmacy drugs prescribed to employees can have a big impact on claims.

For small employer groups (10-40 enrolled employees) the effect on underwritten plans can be devastating. One or two employees prescribed high dollar drugs can force the employer to take the double digit increase offered at renewal with no offers from another insurer.

Unlike larger employers; who may prefer self-funding, fully-insured plans have captive PBM's, and with rebate dollars at stake, most insurers will not allow the employer to exclude specialty drugs, or create alternative programs.

Groups in the 51+ space have better options. Self-funded plans with a third party PBM (Pharmacy Management Company) allow the group to carve out speciality pharmacy; either by total exclusion, leaving the employees to the mercy of manufacturer's assistance programs, or more often, excluded in the plan document, but covered if qualification for the assistance program fails.

So what are employer groups to do? Either put on the black hat and exclude speciality drugs all together, which targets the employees with the greatest need, or choose the better alternative, a Pharmacy Optimization Program (POP) that catches higher dollar drugs when prescribed, and seeks the best alternative for the employee on a case-by-case basis.

Employees are matched with the any manufacturer's assistance programs first, and if unqualified, the medication can be sourced for the best possible pricing, and in most cases, shipped right to the employee's door.

A well managed POP plan, which allows the employer to set the threshold; typically a retail cost of $500-$1250, is the best tool for long-range cost control.

A fair example would be respimat devices, which often cost $250-$700, now made available for $0 co/pay in the POP Plan, bring costs down for employees with Asthma and COPD; eliminating costly hospital stays and trips to the ER due to skipped medications to preserve personal supply.

Injectable drugs are the most challenging, but even here the average savings on the POP Plan is $1500-$2500 a month per-med. In a group where 3-5 employees are prescribed high dollar injectables, the savings can add up quickly.

Best advice, before you surrender to the idea of paying 5-8% more per-year in annual medication costs, ask your PBM what kind of POP plans are available, and prior to renewal, shop around for a PBM with the best approach for your workforce.

Just like any other product, PBM's vary widely in their approach to specialty medications, and only a few have programs that offer real savings and value.