Prescription Drug Costs a Larger Piece of the Benefits Pie 

Increases in drug benefit cost per employee have outpaced total health benefit cost increases for the past couple of years, according to Mercer’s National Survey of Employer-Sponsored Health Plans. So while it’s not surprising that prescription drugs account for a bigger share of overall health spending, the rate at which the Rx slice of the pie is growing in employer-sponsored coverage in particular is dramatic. Recent analysis from the Kaiser Family Foundation shows that while retail drugs account for 10% of national health spending, they account for 19% of total health spending when looking at employer-sponsored benefits. Despite the staggering disparity, it’s possible that figure may even be understated, since it doesn’t account for medications administered in hospitals or physician offices. Employers have benefited from the positive impact of drugs going generic for several years, however that is now sharply slowing – just as a slew of new specialty drugs have begun entering the market. Strategies to manage this potential cost spike involve close attention to your formulary and also the place of service for some therapies. It’s important to act now. You do not want to be the last one to get on board with new strategies or it will cost you!

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