In today’s market if you’re seeing prescription drug trend estimates in the single digits, you should know: those numbers don’t reflect reality. Some trend calculations may focus solely on manufacturer drug price inflation and therefore dramatically understate actual or true prescription benefit trends. To accurately project trends, additional critical factors must be considered:
- Utilization Patterns – Prescription volume increases yearly as population age and chronic conditions become more prevalent and members simultaneously shift to newer, costlier alternatives. Medical advancements allow for earlier diagnosis which drives longer treatment duration and higher utilization.
- Specialty and Non-Specialty Pipeline Impact – New to market drugs typically launch at premium price points as compared to existing products. These treatments often expand the treatable population while commanding unprecedented costs.
The Risk of Underestimating
When these factors are properly weighted, we consistently see trends in the mid to higher teens. When plans understate drug trends, they create severe budget shortfalls. This forces employers to make radical mid-year plan design adjustments or significantly increase contributions or benefit reductions the following year, all while making it increasingly difficult to secure stop-loss coverage in the following year without significant rate increases.
Looking Ahead
While we can’t control drug prices, we can control how benefits are managed. That’s where Benecard Services is different. Instead of just chasing rebates and managing unit costs, we have aligned financial interests with our clients that focus on getting members the right medications while keeping costs in check. No conflicts of interest ― just patient-centered care that works.
With more specialty and GLP-1 drugs in the pipeline, these trends will only intensify. Contact us today at (800) 734-9528 or talktous@benecard.com to discuss how Benecard is helping employers tackle rising drug trends.
