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2008 Prescription Benefit Managers

May 30, 2008
Related Topics: Health and Wellness, Featured Article, Compensation


In order to better manage pharmacy benefit costs, employers are using familiar strategies, such as tiered co-payments and cost-sharing, as well as actively encouraging members to use generic drugs and mail-order plans, according to a Mercer survey released in March 2008. More than a fifth of all large employers, and nearly half of those with 20,000 or more employees, require coinsurance for one or more drug categories.

"Coinsurance offers greater price transparency and allows employers to share costs consistently with employees, even when drug prices increase or fluctuate," according to Mercer. "In addition, coinsurance supports consumerist strategies; the pharmacy benefit has been identified as one area in which the use of coinsurance can have an immediate effect on member buying habits." Employers also are exploring innovative techniques to improve drug therapy compliance as a way to control total health plan spending in the future, Mercer says.

The payoff is that employers are closing the gap between increases in prescription drug costs and overall medical costs. In 2007, prescription drug costs rose 9.3 percent among employers with 500 or more employees. Overall medical costs for that period rose 5.1 percent. In 2000, by contrast, drug benefit costs rose 18.3 percent and health benefit costs rose 6.6 percent.

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