Americans upset about the rising cost of prescription drugs aren’t likely to see relief anytime soon. The Kaiser Family Foundation recently reported that price increases for common brand-name drugs are outpacing inflation. Another study, conducted by PricewaterhouseCoopers, found that the cost of specialty drugs is rising 15 percent per year. That’s more than twice the rate of general prescription drugs. Rising prescription costs are onerous for many, and potentially life-threatening for others. If patients can’t afford their medication, they may abandon it altogether. The Academy of Managed Care Pharmacy found that cancer patients with high out-of-pocket medication costs were less likely to fill their prescriptions. Such noncompliance could lead to complications and costly hospitalizations later on.
Pharmacy benefit managers (PBMs) may help consumers to reduce their pharmaceutical costs. PBMs process pharmacy claims, maintain the formulary (a list of drugs covered by a patient’s insurance plan), and negotiate with pharmaceutical companies for rebates and discounts. They may also offer additional services, such as mail-order pharmacies or online prescription renewals.
“I think that a lot of the focus is going to be on cost containment,” Tery Baskin, founder of medicine service RxResults, says of PBMs. Baskin says that historically, PBMs have acted in their own best interests rather than those of the customers. Although PBMs have not been without controversy (and lawsuits), the outlook for prescription management appears to be positive. According to a recent Reuters article, analysts are predicting higher earnings over the next decade for PBM giants Medco (NYSE:MHS) and Express Scripts (NASDAQ:ESRX).
Medco Health Solutions provides PBM services for approximately one in five Americans, according to the company’s website. Clients can order prescription refills online, check on their order status, research drug information, review their benefits, and obtain pricing information.
Cypress Care uses technology to address drug selection and healthcare provider involvement for workers compensation claims and the auto insurance market. The company breaks the management process into different components, each with its own potential cost savings, with the goal of ensuring customers get the correct medication at cost-effective prices.
BioScrip (NASDAQ:BIOS) offers a mail service pharmacy, drug-specific and multi-tiered co-pays, refill notifications for chronic care patients, and an Online Drug Utilization Review to identify areas where drugs are over-utilized, duplicated or overdosed. The company also operates community pharmacies throughout the U.S.
As prescription costs rise and 32 million Americans suddenly become covered under healthcare reform, there will also be opportunities for PBM alternatives such as RxResults. The Little Rock, Ark.-based company is not a PBM, but the company does work with PBMs to reduce prescription costs for clients. Rather than relying on manufacturer rebates, RxResults utilizes an evidence-based approach to determine the most effective treatment at the lowest net cost.
Other companies deliver pharmacy management services to niche markets. Companies in this space include Allion Healthcare, a provider of pharmacy and disease management services with a focus on HIV/AIDS; Millennium Pharmacy Systems, which works with long-term care organizations; and Comprehensive Pharmacy Services, which offers pharmacy management services to acute care hospitals and behavioral systems.
A visit to the Pharmacy Benefit Management Institute’s directory shows that there are plenty of PBMs out there. Will they help the average American lower their healthcare costs? Do you know of any prescription management services that offer an alternative to the traditional PBM?