How to Reduce Your Company’s Prescription Drug Costs

Bad boys and girls of big pharma. Value frameworks. And The Big Lebowski. All were part of The Prescription and Specialty Drug Forum hosted by Kaiser Permanente (as Group Health) on September 28. National and local business and health care experts addressed an audience of employers and producers eager to hear what’s being done to fight the dramatic rise in prescription drug costs.

Why are prescriptions drug prices climbing at such an alarming rate? Keynote speaker Ceci Connolly, president and CEO of the Alliance of Community Health Plans (ACHP), cited three major causes:

  • Specialty drug prices. Recent specialties have been introduced at high prices. For instance, the hepatitis C drug Sovaldi costs $84,000 for a full course of treatment. Costs of long-standing specialties are also skyrocketing. Avonex, a multiple sclerosis medication, has increased in price by 537 percent since its introduction in 2001.
  • Bad boys and girls of pharma. More and more pharmaceutical company CEOs are raising drug prices for no other reason than they can. The most recent example involves Heather Bresh of Mylan, who raised the price of EpiPens by more than 500 percent.
  • Brand name drug prices on the rise. Seven brand-name drugs that treat diabetes increased in cost from 93 percent to 325 percent over a 5-year period ending in early 2015.

It all adds up. “PricewaterhouseCoopers projects that pharmacy costs will make up 17 percent of an employer’s total health care cost in 2017,” said Connolly.

Kaiser Permanente executive vice president Bob O’Brien noted that consumers are also feeling the pain—one in four Americans have a difficult time affording their medications. He turned to the Jeff Bridges character in The Big Lebowski to colloquially and accurately sum up the issue. “As The Dude might say, ‘this whole pharma thing is a bummer, man.’”

But there is hope.

What’s being done

Long-term solutions include fair drug pricing legislation that will bring transparency to pharmaceutical company cost structures. Organizations such as the American Heart Association, Tufts Medical Center, and the Memorial Sloan Kettering Cancer Center are also working to develop “value frameworks” to help patients evaluate historical medication effectiveness against price.

Connolly went on to say that ACHP members, such as Kaiser Permanente, have developed ways to ensure that patients receive effective—and cost effective—medication whenever possible. Three strategies in particular stand out.

  • Care coordination. The entire care team—doctors, nurses, and pharmacists—use electronic medical records to be aware of a patient’s entire medical and prescription history, helping to eliminate harmful drug interactions.
  • Medication therapy management. Pharmacists make sure that drug therapies are in harmony and adjust accordingly.
  • Physician leaders. Doctors look at every aspect of patient care—including drug pricing—from a clinical perspective. Less costly but equally effective therapies can be prescribed to help lower the total cost of care.

What’s next in prescription drug costs

Most will agree that there is no simple fix to the dramatic rise in specialty drug prices and the impact pharmacy charges are having on employers’ health plan costs. It will take the combined efforts of employers, legislators, health plans, producers, and pharmaceutical companies to arrive at an equitable solution. But it’s conversations like this one that moves us forward in the right direction.



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