Plan sponsors can’t afford to offer plans where plan members can go to any pharmacy, pay the same copay regardless of the retail price, and have the cost funded at the point of service using other people’s money.
There is a better way, it’s the old fashion way to provide plan paid prescription drugs for plan members. It employs the philosophy of the Greatest Good For The Greatest Number.
Remove the third party payer at the cash register. Plan members purchase needed drugs at the point of service with their own money. For the first time since the advent of Pharmaceutical Card System (PCS) in 1984, plan members will question prices and shop for the best and lowest prices they can find.
I did that recently, checking prices at three pharmacies for a generic drug within a two mile radius. The prices ranged from a high of $91 to a low of $18. Guess who had the lowest price. It was a small mom & pop pharmacy, not a retail giant like Walgreens or CVS.
Plan members can get reimbursed by the plan just like back in the old days. Fill out a simple claim form, include the receipts, and mail to the TPA for claim reimbursement.
Plan sponsors don’t need a PBM. Members can go to Walmart or HEB and get hundreds of prescriptions for $5 or less for a 30 day supply. Most are generic drugs which can take care of 90% of one’s prescription needs.
A national PBM offers a special generic only drug plan, covering 430 drugs at no cost to plan members, with home delivery or brick & mortar pickup (acute drugs) for a low monthly capitated fee of less than $7 per month per employee.
“But employees can’t afford to pay upfront for their drugs and some will die because of it!” says the mother of Little Johnny who’s on a $20,000 a month drug. “Where am I going to come up with $20,000!”
Well, currently your co-workers are paying on your behalf in the form of higher insurance costs. That’s where your money is coming from now. Have you thanked them recently?
In the future, when you need that $20,000 drug, pass the hat around the office for donations. It’s not unlike what’s happening already. Or, you can always get another job down the street and let their plan pay for it. Shifting risk from one employer to another is a strategy more employers are contemplating these days.
Better yet, Little Johnny may qualify for free drugs through the manufacturer patient assistance program. Turning down Little Johnny would not read well in the local newspaper.
As a side note, and one which illustrates how crazy our health care system has become, a group we manage hired a new employee in July 2022. Her insurance became effective immediately but she was soon upset to learn her $500,000 a year drug habit (3 specialty drugs) was not covered! Little did her employer know they had hired a $65,000 a year employee who was really a $565,000 per year employee. But the good news is the group had adopted The Hot Potato Risk Transfer Method by dropping all specialty drug coverage thus avoiding potential devastating hits like this one. But don’t worry, there was a happy ending. Help was quickly on the way and the employee was able to qualify for free drugs through pharmaceutical patient assistance programs.
If every plan sponsor on the planet adopted this common sense strategy, drug prices would fall over night. Little Johnny’s drug wouldn’t cost $20,000 any more.