2018 started off full of high expectations for how health care costs and delivery would be revolutionized, but it ended up being a fairly unremarkable year. Among other things, we saw the federal government honing in on reducing pharmaceutical spending, from the White House proposing an elaborate drug pricing strategy to CMS unveiling new drug payment programs, and even pharmaceutical manufacturers promising to slow (or stop) price hikes. Yet, according to an analysis by Associated Press there were 96 drug price increases for every one price decrease from the start of 2018 through July. Furthermore, immediately after President Trump announced in July that pharmaceutical manufacturers would slash prices, the list prices of 395 drugs rose.
As brokers and their clients start planning for the coming year, one of the biggest areas that benefit managers and advisors will be targeting to rein in costs is pharmaceutical spend. Especially in light of 2018, many will rely less on health care policy and will instead take matters into their own hands to move the needle on annual pharma spend, which is the number one driver in health care costs. Now that the pre-holiday, end-of-year push is over, benefits departments around the country are using Q4 and Q1 to take a proactive look at their strategy and goals for the next few years.
Looking ahead to 2019 and 2020, most benefit professionals should assume drug prices will continue to increase and that the economy will slow down with potential recessionary changes, so they will need to remain as competitive as possible with their benefit plans. To address these challenges, many will look beyond the status quo to find new levers to pull to control pharma benefit costs, while maintaining as many options for employees as possible. Instead of rolling out numerous new initiatives all at once, a growing trend is ongoing innovation — experimenting with just one or two new services or products each year in order to evolve with the changing political, economic and health care landscapes. Continuous and incremental innovation will continue to emerge as the best path for reducing pharma costs while maintaining, or improving, employee satisfaction.