Strategies to reduce prescription drug costs (Yes, it really is possible)

The media spotlight on the cost of prescription drugs since the start of the COVID-19 pandemic has created a common misperception that the price of all prescription drugs has skyrocketed in recent years. While it is true that the list prices of some drugs have increased at a modest pace, in many cases, the net price of these same drugs has actually decreased. However, fueled by broader public awareness on the cost and availability of new specialized drugs, there is a common misperception around what is driving the cost in spending on prescription drugs for employers in 2023. 

Benefit advisors, who are looking to reduce health care costs for their clients while ensuring continued access for patients, should adopt innovative strategies to get ahead of emerging trends in the pharmaceutical industry. While lowering the percentage of health care spending on prescription drugs cannot be solved with a panacea, there is an abundance of opportunities that benefit advisors and employers can utilize to save themselves and their employees money. In the current market, it’s critical for employers to stay informed and identify industry trends, while creating solutions that work for the company and its specific employee population.

One important factor driving up the cost of certain prescription drugs is the increased cost to bring new drugs to market. The significant increase in development costs, along with limited access for patients to these new drugs, has driven up the overall spend on prescription drugs for many employers. But solutions can lie within employer benefit plans. Given the rise in spending on prescription drugs, benefit advisors and employers should give the same weight to prescription drug costs as other medical expenses when looking to reduce overall health care spend.