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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