Pharmacy costs are one of the fastest-growing components of healthcare spending, yet they remain a mystery to many plan sponsors. If you’re an employee benefits consultant or a director of benefits, understanding the drivers of these costs is essential to protecting your plan’s financial health while ensuring members receive the care they need.

Let’s delve into the four key drivers of pharmacy costs and how you can take control:

1. Price: What Are You Really Paying?

Price is influenced by the list price of medications, inflation, and the terms negotiated with pharmacy benefit managers (PBMs). Contractual elements like rebates, fees, and discounts can either reduce costs or camouflage hidden markups. For example, PBMs might focus on maximizing rebates rather than minimizing your total drug spend, creating a misaligned incentive structure.

Action Step: Work with a fiduciary PBM to ensure your plan’s best interests come first. A fiduciary model PBM guarantees transparency and ensures cost-reducing strategies directly benefit your plan.

2. Product Mix: The Specialty Drug Dilemma

Specialty medications represent less than 2% of prescriptions but often consume over half of a pharmacy plan’s budget. Additionally, choosing between generics and brand-name drugs—or traditional versus specialty medications—dramatically affects overall costs.

For instance, an increase in the specialty dispensing rate from 1% to 3% can add a staggering $9.1 million to a $10 million annual plan spend. This underscores the importance of proactive management of your plan’s product mix.

Action Step: Adopt a value-based formulary that prioritizes clinically effective and cost-efficient medications. This approach can balance quality care with financial responsibility.

3. Utilization: The Impact of Volume

The frequency and duration of prescriptions, along with the channels through which they’re filled, directly affect your pharmacy spend. Key factors include:

• Number of utilizers: A growing number of plan members taking medications.
• Days’ supply: Long-term prescriptions, like 90-day supplies, may lower refill costs but increase upfront expenses.
• Channel mix: Choosing between retail, mail-order, or specialty pharmacies can significantly influence costs.

Action Step: Implement client-patient-first utilization management programs to ensure prescriptions are appropriate and cost-effective without disrupting care.

4. Cost Share: Influencing Consumer Behavior

Cost share—the portion of expenses covered by members through copays, coinsurance, and deductibles—can shape medication adherence and utilization patterns. A poorly designed cost-share structure might lead to higher downstream medical costs due to nonadherence.

Action Step: Design benefit structures that align cost-sharing with plan goals, ensuring members have access to necessary medications without excessive financial burden.

Your Path to Smarter Pharmacy Spend

Addressing these drivers doesn’t require compromising care quality. By focusing on transparency, informed decision-making, and strategic partnerships, you can significantly reduce costs while supporting positive outcomes.

At TransparentRx, we specialize in empowering plan sponsors with the tools and insights they need to succeed. Let us help you navigate these challenges with confidence.

Learn more about controlling pharmacy costs by partnering with TransparentRx. Visit transparentrx.com today.

How Accumulator Programs Exploit Patients and Drive-Up Medical Costs and other notes from around the interweb:

• How Accumulator Programs Exploit Patients and Drive Up Medical Costs. Accumulator programs collect the maximum amount of patient copay assistance at the start of a year, to exclude it from the patient’s annual cost-sharing limits. They target unsuspecting patients and send them hefty, unanticipated medical costs later in the plan year. A California woman with stage 4 lung cancer, the named plaintiff, sued after Blue Cross Blue Shield (BCBS) blocked her from accessing AstraZeneca’s co-pay assistance for Tagrisso, an expensive specialty medication. AstraZeneca provides co-pay assistance to commercially insured patients like her, but the lawsuit claims BCBS’s involvement in SaveOnSP deprived her of this benefit, forcing her to shoulder excessive healthcare expenses.

• Drugmakers paid pharmacy benefit managers to avoid restricting opioid prescriptions. There have been many entities accused of being the culprits of the spread of opioid abuse across the country during the last few years. One group had not been held accountable — until a recent New York Times investigation exposed how Big Pharma incentivized pharmacy benefit managers not to restrict painkiller prescriptions. This information has added a new layer of blame to a convoluted crisis. For years, pharmacy benefit managers “took payments from opioid manufacturers,” including Purdue Pharma, in return for “not restricting the flow of pills,” The New York Times said in its exposé. As tens of thousands of Americans succumbed to overdoses and the opioid crisis raged on, “the middlemen collected billions of dollars in payments.” The benefit managers “exert extraordinary control over what drugs people can receive and at what price,” the Times said.

• How a Duty To Spend Wisely on Worker Benefits Could Loosen PBMs’ Grip on Drug Prices. Ann Lewandowski knows all about pharmacy benefit managers, or PBMs, the companies that shape the U.S. drug market. Her job, as a policy advocate at drugmaker Johnson & Johnson, was to tell patient and physician groups about the PBMs’ role in high drug prices. Armed with that knowledge, Lewandowski filed a potentially groundbreaking lawsuit in February. Rather than targeting the PBMs, however, she went after a big company that uses one — her own employer, Johnson & Johnson. Lewandowski charges in her lawsuit that by contracting with the PBM Express Scripts, which is part of the insurance giant Cigna, Johnson & Johnson — which fired her in April — failed in its duty to ensure reasonable drug prices for its more than 50,000 U.S. employees.

• PBM Contracting and Administration: What Are the Rules of the Road for Self-Insured Employers? Recently, PBMs have faced growing scrutiny, especially for their role in drug pricing and lack of transparency. Less attention has been given to the misuse of drug formularies—the foundation of drug benefits, listing medications covered by health insurance. While some argue formularies’ purpose has remained consistent over 30 years, others disagree. Initially, a pharmacy and therapeutics committee within a PBM, health plan, or other organization developed drug formularies. Clinicians and other experts on the committee determined the drug’s safety, efficacy, and unique clinical aspects. If the drug met their standards, they placed it on the formulary.

Why TransparentRx Is Your Trusted Partner for Smarter Pharmacy Benefits

At TransparentRx, we specialize in delivering fiduciary pharmacy benefit management services that prioritize transparency, cost containment, and optimal patient outcomes. Our unique approach helps self-funded employers, benefits consultants, and health plan sponsors navigate the complexities of pharmacy benefits while reducing costs and enhancing care.

If you’re ready to take control of your pharmacy benefit strategy and eliminate hidden fees, contact TransparentRx today for a consultation. Let us help you achieve smarter, more effective benefits management.

Many plan sponsors discover too late that one of the biggest drivers of their pharmacy spending isn’t the price of the drugs themselves. It’s the hidden margin between what the PBM bills to the plan and what it pays the pharmacy, known as spread pricing. The trouble starts in the RFP process, where cost comparisons often appear clean and straightforward on paper. In reality, three challenges make it difficult to pinpoint true costs thus the real problem with PBM spread pricing.

1. Opaque Language
   A Director of Benefits once confided that her initial pricing proposal seemed too good to be true. The PBM’s bid boasted impressive discount guarantees, but the contract’s language was vague on how those savings would be passed through. Later, she learned that pharmacy claims were paid at a lower rate than what the plan was billed, with the PBM pocketing the difference.

2. Focus on Discounts or Price Benchmarks Over Net Cost
   A CFO reviewing multiple PBM bids noticed they focused on discount guarantees: “AWP minus X%” for brands and “MAC price” for generics. The spreadsheets looked competitive, but he never found a clear statement of net costs. Months into the contract, the weekly invoices revealed that true costs for high-volume generics kept creeping up. The CFO realized that the “savings” factored into the spreadsheets didn’t show how spreads were adding to the final bill.

3. Contract Complexity
   One employee benefits consultant described a convoluted 40-page PBM agreement where terms like “House Generics” and “Brand Base Guarantee” were buried. This made it tough to reconcile how much the PBM paid pharmacies with what the plan owed. By the time they uncovered discrepancies, it was clear the spread fees were much higher than expected.

How to Address PBM Spread Pricing Challenges

• Insist on Pass-Through Pricing
  Require that all negotiated rates, including post-adjudication, flow directly to your plan. If a PBM pays a pharmacy $10 for a claim, your plan pays the same $10, not $100. Ask that every RFP explicitly confirms whether the PBM guarantees this standard.

• Continuously Monitor Claims and Terms
  Check whether the PBM’s invoiced claim file aligns with what the pharmacy actually received. Audits don’t have to be a headache when conducted regularly or paired with automation. If something doesn’t match the agreement, bring it up immediately.

• Work with a Fiduciary PBM
  A fiduciary PBM won’t profit from spread or undisclosed fees. The PBM’s commitment ensures that you see the true cost of each prescription. The fiduciary model also builds trust and transparency, so you can accurately plan and manage costs without worrying about hidden margins.

It’s possible to stop paying for spreads you didn’t sign up for. Clarity in contracts, regular checks on performance, and partnering with a PBM that truly aligns with your goals can remove the guesswork and give you more control over your pharmacy benefits.

How a Duty to Spend Wisely on Worker Benefits Could Loosen PBMs’ Grip on Drug Prices and other notes from around the interweb:

• How a Duty To Spend Wisely on Worker Benefits Could Loosen PBMs’ Grip on Drug Prices. Ann Lewandowski knows all about pharmacy benefit managers, or PBMs, the companies that shape the U.S. drug market. Her job, as a policy advocate at drugmaker Johnson & Johnson, was to tell patient and physician groups about the PBMs’ role in high drug prices. Armed with that knowledge, Lewandowski filed a potentially groundbreaking lawsuit in February. Rather than targeting the PBMs, however, she went after a big company that uses one — her own employer, Johnson & Johnson. Lewandowski charges in her lawsuit that by contracting with the PBM Express Scripts, which is part of the insurance giant Cigna, Johnson & Johnson — which fired her in April — failed in its duty to ensure reasonable drug prices for its more than 50,000 U.S. employees.

• Drugmakers paid pharmacy benefit managers to avoid restricting opioid prescriptions. There have been many entities accused of being the culprits of the spread of opioid abuse across the country during the last few years. One group had not been held accountable — until a recent New York Times investigation exposed how Big Pharma incentivized pharmacy benefit managers not to restrict painkiller prescriptions. This information has added a new layer of blame to a convoluted crisis. For years, pharmacy benefit managers “took payments from opioid manufacturers,” including Purdue Pharma, in return for “not restricting the flow of pills,” The New York Times said in its exposé. As tens of thousands of Americans succumbed to overdoses and the opioid crisis raged on, “the middlemen collected billions of dollars in payments.” The benefit managers “exert extraordinary control over what drugs people can receive and at what price,” the Times said.

• Zepbound Approved for Obstructive Sleep Apnea. The U.S. Food and Drug Administration on Friday approved Eli Lilly’s (LLY.N), opens new tab weight-loss treatment, Zepbound, for obstructive sleep apnea, making it the first drug greenlighted to directly treat patients with the common sleeping disorder. The regulator approved the drug for moderate to severe obstructive sleep apnea in adults with obesity, the company said. The approval opens up a wide market of patients for Lilly at a time when demand for Zepbound is already surging. It could also strengthen Lilly’s case with commercial insurers and employers, who have previously hesitated to cover the drug due to its high cost. Shares of the Indianapolis-based drugmaker were up 1.14% in after-market trading following the announcement. Sleep apnea patients stop breathing briefly while sleeping, disturbing the sleep cycle and causing long-term complications such as heart conditions. The condition affects roughly one billion people globally.

• PBM Contracting and Administration: What Are the Rules of the Road for Self-Insured Employers? Recently, PBMs have faced growing scrutiny, especially for their role in drug pricing and lack of transparency. Less attention has been given to the misuse of drug formularies—the foundation of drug benefits, listing medications covered by health insurance. While some argue formularies’ purpose has remained consistent over 30 years, others disagree. Initially, a pharmacy and therapeutics committee within a PBM, health plan, or other organization developed drug formularies. Clinicians and other experts on the committee determined the drug’s safety, efficacy, and unique clinical aspects. If the drug met their standards, they placed it on the formulary.

Directors of benefits face the challenge of managing escalating pharmacy costs while ensuring optimal outcomes for plan members. Pharmacy Benefit Managers (PBMs) are increasingly leveraging data analytics to address this complex task. How pharmacy benefit managers leverage data analytics is a must-read Q&A. Let’s explore the role of data analytics in PBM operations, its benefits, challenges, and future potential.

Why Do PBMs Use Data Analytics?

PBMs use data analytics to balance cost savings with improved patient care. Analytics optimizes formulary design, identifies patients at risk of non-adherence, detects anomalies in claims data to combat fraud, and tailors wellness programs to member needs.

What Type of Data Do PBMs Collect?

PBMs collect prescription claims, clinical data, adherence metrics, drug pricing trends, and patient demographics. This comprehensive data pool supports targeted interventions and strategic decision-making.

Would a PBM Contact a Provider or Pharmacy About an Alternate Medication Regimen?

Yes, PBMs often collaborate with healthcare providers or pharmacies when analytics suggest that a patient could benefit from an alternative regimen. These interventions focus on optimizing clinical outcomes, reducing costs, or improving adherence, while maintaining respect for the provider-patient relationship.

How Do PBMs Address Patient Needs With the Data They Collect?

PBMs segment patient populations to deliver targeted interventions, predict health outcomes, and personalize support services. For example, analytics might help identify patients who could benefit from additional resources, such as mobile tools or nurse support lines.

How Do Data Analytics Help Enhance Patient Care?

Data analytics increases medication adherence through automated reminders and predictive models, streamlines care coordination by bridging gaps between stakeholders, and identifies cost-effective therapies to ensure access to affordable, clinically effective medications.

Challenges: Changing Regulations and HIPAA Compliance

Regulatory Issues

Evolving regulations may restrict access to critical data or impose additional compliance requirements, complicating analytics efforts.

HIPAA Compliance

HIPAA adds challenges like safeguarding sensitive data and navigating restrictions on sharing patient information. PBMs must ensure robust security measures and strict compliance to utilize analytics effectively.

The Future of PBM Data Analytics

The integration of Artificial Intelligence (AI) and machine learning will revolutionize PBM analytics by enabling:

• Real-Time Insights: AI-powered tools can process vast amounts of data instantly, delivering actionable insights faster than ever.
• Enhanced Predictive Modeling: Advanced algorithms will refine the ability to predict patient behavior and health outcomes.
• Personalized Care: AI will drive highly customized patient support programs based on individual data.

Conclusion

Data analytics is a cornerstone of modern PBM operations, driving cost control and improved patient outcomes. However, regulatory challenges and privacy concerns necessitate careful navigation. With advancements in AI, PBMs are poised to further enhance their analytics capabilities, offering even greater value to plan sponsors and members alike.

Proposed Legislation Targets Pharmacy Benefit Managers, Calls for Pharmacy Divestiture and other notes from around the interweb:

• Proposed legislation would require pharmaceutical benefit managers to divest of pharmacies. The bill, sponsored by U.S. Senators Elizabeth Warren, a Democrat, and Josh Hawley, a Republican, will force companies owning health insurers or pharmacy benefit managers to divest their businesses operating pharmacies within three years. Representatives Diana Harshbarger, a Republican, and Jake Auchincloss, a Democrat, are also supporting the bill, which will be introduced in the Congress. PBMs negotiate prescription drug prices between insurers, pharmacies and drugmakers, and directly reimburse pharmacies for prescription drugs included under their agreed terms. They have previously come under scrutiny for their influence over prescription drug prices. “PBMs have manipulated the market to enrich themselves — hiking up drug costs, cheating employers, and driving small pharmacies out of business. My new bipartisan bill will untangle these conflicts of interest by reining in these middlemen,” said Senator Warren.

• Mark Cuban: Buying prescription drugs is ‘just like buying lettuce‘. Mark Cuban is making his Cost Plus Drug Co. online pharmacy and discount card program a test of the proposition that the U.S. prescription drug market is just another market. When employers use traditional pharmacy benefit managers, they often have a hard time getting basic information about claims, the rebates the PBMs have negotiated and where the rebate value is flowing, Cuban added. Cuban argued that the prescription drug market and other health care markets can work like the market for fruits and vegetables if the suppliers provide enough information. “If you want an efficient market, you have to have pricing available for everybody to evaluate,” Cuban said.

• Antitrust Class Actions Against CVS, Other Pharmacy Benefit Managers Are Piling Up. Plaintiffs, independent pharmacies, claimed the defendants “have vertically integrated” with health care giants such as insurance companies, health care providers, private drug labelers and others. As a result, the complaints say, pharmacy benefits managers use anticompetitive methods to suppress reimbursements for discount card payments, which allegedly causes stand-alone pharmacies to suffer and even go out of business. “Each of the PBM Defendants is a wholly owned subsidiary of a healthcare conglomerate that also owns mail-order, specialty, and/or retail pharmacies, large health insurance companies, and other players in the market for prescription dispensing services,” the Philadelphia Association of Retail Druggists argued.

• PBM Contracting and Administration: What Are the Rules of the Road for Self-Insured Employers? Recently, PBMs have faced growing scrutiny, especially for their role in drug pricing and lack of transparency. Less attention has been given to the misuse of drug formularies—the foundation of drug benefits, listing medications covered by health insurance. While some argue formularies’ purpose has remained consistent over 30 years, others disagree. Initially, a pharmacy and therapeutics committee within a PBM, health plan, or other organization developed drug formularies. Clinicians and other experts on the committee determined the drug’s safety, efficacy, and unique clinical aspects. If the drug met their standards, they placed it on the formulary.

For years, Pharmacy Benefit Managers (PBMs) have controlled the narrative around prescription drug costs, operating behind a veil of secrecy. But self-insured employers, brokers, and consultants have the power to rewrite that story. Watch “Navigating PBM Profit Tactics” to uncover strategies for managing costs and driving transparency in pharmacy benefits.

During a recent webinar, Tyrone Squires, a visionary in pharmacy benefit management, shed light on the practices that drive up costs and provided actionable strategies to help organizations take control. If you’ve ever felt frustrated by rising pharmacy expenses or wondered where your dollars are truly going, this session is your road map to clarity and empowerment.

Unmasking PBM Profit Strategies

PBMs are masters of complexity, employing tactics that often go unnoticed until it’s too late. Here are a few common practices they use:

• Spread Pricing: PBMs charge employers more for drugs than they reimburse pharmacies, pocketing the difference.
• Rebate Retention: Instead of passing savings to employers, PBMs keep significant portions of manufacturer rebates.
• Hidden Fees: Contracts with vague language allow for fees that inflate overall costs.

But these tactics are not inevitable. By understanding how they work, you can uncover hidden revenue streams and redirect them toward meaningful healthcare investments.

Why Fiduciary PBMs Are Game-Changers

Imagine a PBM that works for you, not the other way around. That’s the promise of the fiduciary model—an approach built on transparency and aligned incentives. Fiduciary PBMs commit to acting in their clients’ best interests, offering:

• 100% rebate pass-through.
• Clear, simple contract terms.
• Fee structures that prioritize value over volume.

With a fiduciary PBM, you’re no longer at the mercy of opaque practices. You’re in control, making decisions that align with your organization’s goals and values.

Practical Steps to Reduce Pharmacy Costs

Empowerment starts with knowledge—and action. Tyrone Squires outlined specific strategies to take charge of pharmacy benefits:

1. Audit Your PBM Contracts: Shine a light on hidden fees and ambiguous terms.
2. Carve Out High-Cost Drugs: Shift specialty medications to more affordable alternatives.
3. Leverage Formulary Management: Create a drug list that balances cost savings with patient needs.

These steps aren’t just about cutting costs; they’re about reclaiming your organization’s right to transparency and fairness.

Oversight Is Key: How to Hold PBMs Accountable

Accountability isn’t a luxury—it’s a necessity. With the right oversight tools, you can ensure your PBM is delivering the value you deserve.

• Conduct Regular Audits: Verify claims, fees, and rebate arrangements.
• Set Clear Performance Metrics: Use KPIs to measure savings and member outcomes.
• Adopt Advanced Analytics: Leverage data to uncover inefficiencies and optimize programs.

Every audit, metric, and analysis brings you closer to a benefits program that works for your organization—not against it.

Believe in the Power of Transparency

Transparency is more than just a buzzword—it’s a movement. When you demand openness, you unlock a benefits plan that serves your team’s health and your organization’s bottom line.

This isn’t just about reducing costs; it’s about creating a system that prioritizes fairness and outcomes. By taking action, you set an example for others, inspiring a ripple effect of positive change in the industry.

Your Journey Starts Here

The path to better pharmacy benefits begins with a single step. Whether you’re a CFO, CHRO, or benefits consultant, now is the time to demand clarity, embrace accountability, and deliver meaningful results for your organization.

Are you ready to lead the change? Watch “Navigating PBM Profit Tactics” and discover actionable insights to manage costs and enhance transparency in pharmacy benefits. Connect with Tyrone Squires today to explore how a fiduciary PBM model can transform your approach to pharmacy benefits.

PBM Contracting and Administration: What Are the Rules of the Road for Self-Insured Employers and other notes from around the interweb:

• PBM Contracting and Administration: What Are the Rules of the Road for Self-Insured Employers? Recently, PBMs have faced growing scrutiny, especially for their role in drug pricing and lack of transparency. Less attention has been given to the misuse of drug formularies—the foundation of drug benefits, listing medications covered by health insurance. While some argue formularies’ purpose has remained consistent over 30 years, others disagree. Initially, a pharmacy and therapeutics committee within a PBM, health plan, or other organization developed drug formularies. Clinicians and other experts on the committee determined the drug’s safety, efficacy, and unique clinical aspects. If the drug met their standards, they placed it on the formulary.

• Effort Underway to Improve Standards for REMS Adjudication. Specialty pharmacists’ Risk Evaluation and Mitigation Strategy (REMS) for high-risk medications is often cumbersome, requiring manual entries and a lengthy, multi-stakeholder process to confirm the drug’s benefits outweigh its risks. Ensuring REMS compliance is sometimes so laborious that a patient does not receive a needed medication. That’s because the authorization to dispense the drug expires after frequent back-and-forth between a pharmacist and REMS administrator. Such delays often are due to nonstandard processes that add complexity and time to an already loaded interaction, the speakers said. “I’ve seen pharmacists in tears over what they have to do to adjudicate a REMS [medication],” said Justin Wilson, BS, the global risk management, and REMS technology lead at Syneos Health, in Morrisville, N.C.

• Legislators urge DOJ to investigate PBMs for potential role in opioid epidemic. Recent reports, including confidential files and information from CVS Caremark, Express Scripts and Optum Rx, suggest the three largest PBMs colluded and conspired to steer patients towards Oxycontin in exchange for $400 million,” the legislators wrote. The allegations stem from an October article in Barron’s that details the findings. The outlet reported that these three firms collected $400 million in rebates and fees from Purdue Pharma over a year ending in late 2017. Barron’s noted that the PBMs kept most rebates instead of passing savings to consumers. The letter also criticizes major PBMs for their ties to health insurers, group purchasing organizations, pharmacies, and other healthcare businesses. Vertical consolidation in healthcare has been a central concern for policymakers looking to reform the PBM industry.

• The Inflation Reduction Act’s implications for employer-sponsored health plans. The Inflation Reduction Act (IRA) aims to lower prescription drug costs and enhance Medicare benefits. While these changes benefit Medicare recipients, they raise concerns for employer-sponsored health plans that are not part of government price negotiations. These plans could see cost increases due to price shifts, with premiums rising for employers and employees alike. The primary concern is that non-Medicare participants will bear these higher costs as pharmaceutical companies and health care providers raise prices to offset lost revenue. Historically, Medicare’s cost reductions have led to higher prices for employer-sponsored plans. When Medicare sets lower prices for services under Parts A (hospital) and B (outpatient), providers often shift costs to those with private insurance to maintain profitability. This trend is expected to continue under the IRA.

Directors of Benefits and employee benefit brokers are under increasing pressure to deliver comprehensive, cost-effective strategies while maintaining exceptional outcomes for plan members. One of the most impactful ways to achieve this is by leveraging data from medical and pharmacy benefit claims. Data alignment is no longer optional—it’s essential for managing costs, optimizing plan performance, and meeting the needs of today’s self-insured employers. Directors of Benefits and employee benefit brokers must grasp how data is revolutionizing medical and pharmacy benefit decisions.

Why Data Alignment Is Crucial for Benefits Management

Medical and pharmacy claims data often exist in silos, creating blind spots in cost management and care strategies. For example, understanding the total impact of high-cost specialty drugs requires analyzing both medical (J-codes) and pharmacy benefits. Without alignment, it’s nearly impossible to identify patterns, optimize formulary decisions, or improve outcomes.

Aligned claims data allow benefits professionals to:

• Pinpoint Cost Drivers: See the complete picture of how certain drugs or conditions affect plan costs.
• Support Better Plan Design: Use integrated data to create benefits that balance cost control with member satisfaction.
• Deliver Strategic Insights: Provide employers with actionable recommendations based on real-world analytics.

Implementing a data-driven approach to benefits management begins with investing in technology that integrates data from medical and pharmacy claims into a unified platform. This step is foundational, as it enables a comprehensive view of costs, utilization, and outcomes. Once the technology is in place, the focus shifts to prioritizing transparency, ensuring that all stakeholders—whether payers, brokers, or plan sponsors—can access and understand the data driving decisions. Transparency builds trust and allows for more informed discussions about cost-saving strategies and plan performance.

Next, fostering collaboration between medical and pharmacy benefit teams is essential. By breaking down silos, these teams can work together to identify patterns, improve member outcomes, and align strategies. The process continues with the adoption of predictive analytics to anticipate trends and costs, enabling benefits professionals to recommend proactive interventions. For example, predicting the impact of high-cost specialty drugs allows brokers to guide employers toward cost-effective solutions before expenses spiral out of control.

Finally, all efforts must converge on a member-centric approach that focuses on improving employee health and satisfaction. By aligning benefits with the needs of plan members—such as medication adherence programs or personalized interventions—employers can achieve better outcomes while controlling costs. As a result, this integrated, step-by-step approach not only enhances decision-making but also positions brokers and benefits directors as indispensable partners in delivering value to self-insured employers.

What Results Can Directors of Benefits and Brokers Expect?

By aligning medical and pharmacy claims data, benefits teams can achieve:

• Cost Savings: Unified data uncovers inefficiencies and opportunities for savings, such as moving high-cost J-code drugs from medical to pharmacy benefits, where discounts and management are more robust.
• Better Employer Retention: Employers want results. Offering aligned, data-driven strategies positions brokers as indispensable partners in their success.
• Improved Outcomes: Benefit strategies rooted in data lead to healthier, more productive employees and fewer costly interventions.
• Stronger Reporting: Unified data simplifies the process of meeting reporting requirements while providing powerful insights to employers.

Why It Matters for Brokers and Benefits Directors

As the healthcare landscape evolves, self-insured employers expect more from their benefits professionals. By driving discussions around data alignment and sustainable strategies, you can position yourself as a forward-thinking leader who delivers measurable results. Data isn’t just a tool—it’s your competitive advantage. Use it to design benefits that control costs, improve outcomes, and meet the demands of the modern workforce.

The Inflation Reduction Act’s implications for employer-sponsored health plans and other notes from around the interweb:

• The Inflation Reduction Act’s implications for employer-sponsored health plans. The Inflation Reduction Act (IRA) aims to lower prescription drug costs and enhance Medicare benefits. While these changes benefit Medicare recipients, they raise concerns for employer-sponsored health plans that are not part of government price negotiations. These plans could see cost increases due to price shifts, with premiums rising for employers and employees alike. The primary concern is that non-Medicare participants will bear these higher costs as pharmaceutical companies and health care providers raise prices to offset lost revenue. Historically, Medicare’s cost reductions have led to higher prices for employer-sponsored plans. When Medicare sets lower prices for services under Parts A (hospital) and B (outpatient), providers often shift costs to those with private insurance to maintain profitability. This trend is expected to continue under the IRA.

• What to know about brand-name and generic drugs. When choosing medications, patients typically encounter brand-name and generic drugs. While both types are designed to treat medical conditions effectively, understanding their subtle differences can help you make more informed decisions regarding your health. One of the first noticeable distinctions between originator and generic drugs is their name. Generic medications are typically named after the drug’s active ingredient instead of the manufacturer’s brand. The cost and appearance of the medication are also key differentiators. Generic medications are typically 80-85% less expensive than the brand-name version, primarily because they undergo fewer development processes. Although the drugs have the same active ingredients, they do not have to include the same inactive ingredients. This means the medication can appear different in color, shape, or size.

• Pharmacies Accuse GoodRx of ‘Inviting Price-Fixing’ in Series of Antitrust Class Actions. The plaintiff pharmacies alleged that GoodRx, a prescription discount card aggregator, and four of the largest pharmacy benefit managers (PBMs) engaged in a conspiracy to fix prices paid to pharmacies for reimbursement of prescription drug claims. “This case involves an unlawful price-fixing agreement among several PBMs—orchestrated by the PBM rate aggregator, GoodRx—to suppress the prices paid to independent pharmacies for generic drugs,” according to one complaint filed Nov. 1 in the U.S. District Court for the Central District of California by an independent pharmacy, Community Care. The complaints allege that when a pharmacy submits claims for reimbursement from a pharmacy benefit manager and the patient pays with a discount card, that PBM uses GoodRx’s pricing software to determine whether another PBM offers a lower discount card price. If they find one with a lower price, the claim is rerouted to that PBM, which minimizes the reimbursements paid to pharmacies.

• The Need for Regulation to Positively Impact Drug Formulary Decisions to Ensure Appropriate Patient Access: A Little-Discussed Topic in Pharmaceutical Policy and Pricing Debate. Most recently, PBMs have received an increasing amount of scrutiny. Two areas that have received significant attention are the PBMs’ impact on drug pricing and the lack of transparency in their business practices. One issue that has not received a great deal of attention is the misuse of the drug formulary—the foundation of the drug benefit—which consists of a list of medications covered by one’s health insurance. Although some would say that the purpose of drug formularies has remained the same over the past 30-plus years, others would disagree. Initially, drug formularies were developed by a pharmacy and therapeutics committee of a PBM, health plan, or other organization. The committee was made up primarily of clinicians and other experts who determined the safety, efficacy, and unique clinical aspects of the drug. If it met their standards, it was placed on the formulary.