HR managers and business owners are liable for ensuring that their pharmacy benefit plan meets their employee’s unique requirements while remaining mindful of cost. However, with the cost of prescription medications continually rising year after year, this can feel like a challenging task for many HR managers and business owners.
The reality is that HR managers and business owners need to be truly knowledgeable about pharmacy benefits. That’s why I’ve created this beginner guide on pharmacy benefits. Its goal is to help HR managers and business owners make better healthcare decisions for employees, which can lead to more cost-effective pharmacy benefits management.
What Are Pharmacy Benefits and How Do They Work?
Pharmacy benefits are part of your employee health benefits and are managed through your healthcare provider. They typically cover medications that must be administered at a provider’s facility or office, depending on the medication delivery method (infusion, auto-injector, etc.) or medications patients must self-administer at home.
The medications covered by your pharmacy benefit can include infusible, oral, topical, or compound medications like lotions, creams, and injectables. But how do pharmacy benefits work? Pharmacy benefits are a part of your healthcare plan, which generally vary from patient to patient and can be customized depending on how you receive your health coverage.
For instance, you may receive health insurance through your employer, whereas another individual may purchase it through the healthcare marketplace. As such, your health plan may include pharmacy benefits that allow you to receive the medications you need at a reduced cost.
Read more: Insurance Basics: Understanding Health Insurance
How Can HR Managers Effectively Manage Pharmacy Benefits for Employees?
HR managers can effectively manage employee pharmacy benefits in several ways, including:
- Carefully selecting a Pharmacy Benefit Manager (PBM) to manage pharmacy benefits for businesses
- Educating employees on their plan and cost-saving strategies
- Closely monitoring drug utilization patterns through data analytics
- Implementing a well-designed formulary and promoting generic and biosimilar options
Additionally, regularly reviewing and adjusting the plan based on employee needs and market trends ensures transparency regarding pricing and cost drivers while balancing employee access to necessary medications.
Read more: Lower Prescription Costs with Discount Prescription Programs
What Are the Cost-saving Strategies for Businesses in Pharmacy Benefits Programs?
Below are the top three cost-saving strategies for businesses in pharmacy benefits programs.
Medical and pharmacy benefit integration
Some employers have pharmacy and medical benefits from different insurance carriers or partners. If that’s the case for your business, you may consider integrating medical and pharmacy benefits to reduce costs, allowing for holistic member support. However, you must note that carriers may be unable to provide the holistic support needed without access to a member’s pharmacy and medical information.
Effective formulary list management
A formulary is the list of drugs a chosen health plan covers, sometimes called an Approved Drug List. This “Approved Drug List” informs employees and their healthcare providers what drugs their employee pharmacy benefits cover. Regularly conducting formulary reviews can ensure appropriate drug coverage, which minimizes waste and saves money.
Intentional utilization management
Effective utilization management, including prior authorization and step therapy, optimizes medication use and lowers costs. These programs are essential to reducing overall costs by directing your employees to a lower-cost treatment while still delivering high-quality medical outcomes and ensuring the safe distribution of medications.
Read more: Negotiating Lowering Medical Bills: What You Need To Know
The Wrap-Up On Pharmacy Benefits 101: A Beginner’s Guide for HR Managers and Business Owners
Working with the right pharmacy benefit consultant, HR managers, and business owners can improve the quality of their pharmacy benefits for their employees while saving money on their prescription drug costs. Contact me today to learn more about how you can get the most out of your pharmacy benefits.
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