When nonprofit health insurer Blue Shield of California announced significant changes to how it conducts pharmacy benefit management (PBM) for its 4.8 million members, the health insurance industry took notice. What does this mean for employers sponsoring health plans? There are a few key points they shouldn’t miss.
The Landscape is Shifting
Blue Shield decided to partner with a handful of new players in what it calls its Pharmacy Care Reimagined program set to launch in 2025. This includes:
- Amazon Pharmacy for direct delivery and support services,
- Mark Cuban’s Cost Plus Drug Company for more transparent pricing,
- Abarca for streamlined payments and claims processing,
- Prime Therapeutics for value-based pricing deals, and
- CVS Caremark for specialty pharmacy services.
According to experts, this move may accelerate the trend taken lately by large insurers who want to dilute the Big Three PBMs — Express Scripts, CVS Caremark and Optum Rx — which currently control over 75% of the nationwide prescription drug market. As costs continue rising, particularly for specialty medications, insurers seem to be taking matters into their own hands.
Major Implications for Employers
So, what does this mean for employers sponsoring health plans? For 2024, experts say big changes are unlikely. But 2025 and beyond may usher in some shifts employers should prepare for.
First and foremost is cost. Blue Shield estimates its new pharmacy model could save up to $500 million annually — about $104 per member. Employers can expect to see some cost savings if their carriers follow suit in expanding PBM partnerships. However, experts warn the structure could also introduce more complexity.
- Administrative Efficiency
With more companies involved, administration may become more cumbersome despite technology investments. Employees will deal with more entities for different services instead of the typical streamlined PBM model. For HR teams with limited staff, this introduces productivity challenges.
More provider choice could improve the member experience on pharmacy benefits. Fast, free medication delivery, added pharmacist support, transparent pricing and easier claims processing are all advantages. However, with more vendors to navigate, the experience may suffer without careful orchestration.
- Specialty Drug Integration
As spending on clinical specialty drugs booms, better integration between medical and pharmacy benefits is critical. When managed holistically, experts suggest improved alignment could enhance specialty medication access while lowering overall costs.
In benefits design, a tension exists between costs and experience. Employees want affordable premiums and out-of-pocket expenses, which employers balance against positive health outcomes. As prescription models evolve, this balancing act intensifies. More choice could mean more confusion in selecting optimal therapies or navigating various pharmacy partnerships.
What Can Employers Do?
As insurers forge new PBM relationships, employers play a key role in ensuring changes advance both outcomes and savings.
- Stay Informed: HR executives should actively monitor carrier communications about upcoming pharmacy benefit structure adjustments and seek clarity where needed.
- Provide Input: Voice priorities around cost targets, specialty drug coverage, administrative efficiency, member experience, and other aspects to help shape future pharmacy models.
- Simplify Choices: With likely more intricacy ahead, clearly communicate changes and provide guidance to help employees choose lower-cost, high-value prescription solutions.
For more employee benefits resources and industry insights, contact INSURICA today.
Copyright © 2024 Smarts Publishing. This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice.