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The Problem

Pharmaceutical costs, especially those for brand name, maintenance drugs, have been a primary driver of health costs, and in turn, health insurance costs, for well over a decade. In 2014, prices for brand, generic and specialty drugs combined increased 10.9%, according to Truveris, a research firm that tracks drug pricing. Breaking it down by category, prices for brand name drugs rose 14.8%; specialty drug prices increased 9.7%; and generic medicines climbed 4.9%.

Many plan sponsors, specifically self-funded groups, have attempted to offset their prescription drug expenses through cost shifting. Typical cost shifting efforts include restricting formularies, raising co-pays, and implementing step therapies and generic only medication mandates. While these measures result in some cost savings, they often represent a significant loss of benefits to the plan members. Additionally, a recent CVS Health research study showed a negative impact on patient health outcomes when insurers placed burdensome caps on drug benefits. Such measures increased costly complications and overall health care use, including hospitalizations from unmanaged or under-managed conditions.

The Solution

The current US health care delivery system and specifically the traditional pharmacy benefit management models have done very little to truly lower plan sponsors’ overall prescription drug costs. In fact, The Centers for Medicare and Medicaid estimate that drug spending will continue to increase by six percent or more annually from 2015-2022. An aging workforce population and an increase in lifestyle-related illnesses, including diabetes, hypertension and cardiovascular disease, will only lead to even higher plan sponsor prescription drug costs.

To effectively confront the skyrocketing costs of prescription medication, employers must be willing to look beyond traditional solutions. Plan sponsors must be willing to look beyond US borders for the acquisition of their members’ medications. Citizens of other developed countries pay far less than Americans for their prescription drugs. On average prescription drug costs are 44% higher in the United States than elsewhere in the world.

RxManage provides plan sponsors the opportunity to reduce the overall cost of health care by offering plan members a voluntary mail order Rx benefit through our network of licensed international pharmacies. All prescription medications offered in the RxManage program are sourced through licensed pharmacies in Tier One countries (as defined by the US Congress) and Good Manufacturing Practices (GMP) certified manufacturing plants.

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