There are more higher healthcare costs ahead for companies like yours and employees everywhere.
Generic drugs could wind up costing you a lot more than you expected.
In fact, researchers estimate a 10% bump in generic pricing in 2015 alone.
That was an eye-opener in Michael J. Staab’s presentation at the 2015 Mid-Sized Retirement & Healthcare Plan Management Conference.
Moving to a higher rate
Why the spike in drugs that have long been marketed as cost-effective?
For one thing, some generics are in limited supply. Plus fewer manufacturers are making these drugs.
That means some generics aren’t qualified to stay on the Maximum Allowable Cost (MAC) list, and they’re getting bumped up to a higher non-MAC/brand drug rate.
Result: You and your employees wind up paying more for these drugs.
4 best practices
Instead of just absorbing the increases, there are certain things employers can and should demand from their pharmacy benefit managers (PBM).
Here are four tactics all employers should be using to keep rising generic costs at bay:
1. Check the MAC list. You can get the list from your PBM and check to see which generics were deleted.
2. Don’t allow non-MAC generics to be priced at brand discount. Talk to your PBM to prevent this pricing from taking place.
3. Negotiate a Generic Effective Rate (GER) guarantee that includes all of your generic drug claims. A GER guarantee is the average percentage discount off the average wholesale price for all generic drugs.
4. Apply preferred and non-preferred generic co-pays to differentiate between the different types of generics workers can get.
Based on “Pharmacy Benefit Strategies for Lowering Prescription Drug Costs,” presented by Michael J. Staab at the 2015 Mid-Sized Retirement & Healthcare Plan Management Conference in San Diego.