Cost-shifting continues to be one of the major tools for employers, although many believe it has been overused. In the majority
of cases, employers decide on cost-sharing by drug category rather than individual drug. Other well known strategies include
developing performance tiers in formularies, where therapies with proven outcomes get more favorable positions, if pharma
supplies good outcomes data and contracts aggressively.
Utilization management is also becoming increasingly important as a cost-control tool for employers. By using retrospective
utilization analysis to inform future benefit-design modifications, employers try to cut significant cost drivers with limited
employer upside in terms of employee productivity or wellness.
Employers favor generics. Through their PBMs and MCOs, many employers are closing formularies and thus limiting therapies
to a few select drugs with good outcomes data. More aggressive disease- and utilization-management programs are becoming commonplace
as part of the PBMs' and MCOs' benefit offering.
Employers are beginning to institute consumer-directed health plans (CDHPs), but penetration is still minimal. Most representatives
at the ERN meeting feel that within the next four years, CDHPs will have a significant impact on pharmaceutical benefits.
One consultant at the meeting stated that CDHPs might only be appropriate for financially strapped organizations, in order
to significantly decrease near-term healthcare costs. Others are not convinced that CDHPs will decrease healthcare costs.
They feel that CDHPs will contribute to employees selecting low-cost options with limited catastrophic benefits, which can
undermine primary and preventive care.
The Visit from Pharma: An Employer Perspective
Pharmaceutical representatives call on most large employers. Generally they see either the medical director or the head of
human resources. Unfortunately, the value of these visits cannot be quantified. Pharma often brings specific product information,
which is informative (and sometimes appreciated). But such information is typically more interesting for providers, insurers,
or hospitals. For the employer, product information is generally not actionable. Employers see more value in partnership opportunities
with pharmaceutical manufacturers, for disease management and member education.
The most immediate opportunities are with large employers, especially those that are self-funded and have the capacity, resources,
and knowledge to become intimately involved in the coverage decisions for pharmaceutical products. In the US healthcare market,
all parties are wrestling with complex questions of access, coverage, and quality, so pharmaceutical manufacturers must position
themselves as part of the solution. Customizing strategic partnerships to meet the needs of the employer will not only help
this new pharma customer, it will provide the pharmaceutical manufacturer a return on investment that can be measured both
in sales and good will. By supporting employer initiatives and better understanding employer needs, pharmaceutical manufacturers
can only improve the market position of their products.
What Pharma Needs to Learn About Employers
ERN participants identified several areas where pharmaceutical manufacturers came up short in discussions with employers.
+ Lack of credible outcomes data. When outcomes data are provided, they are not tailored to the needs of employers. In the absence of good outcomes data, employers
tend to manage costs only. Employers need to see data in "real-world" practice that illuminates the therapy's impact upon
health outcomes. They need to see health cost-offsets presented in terms of quality of life (QOL), disability costs, and absenteeism
reduction. A key concern for employers is adherence to a needed therapy, so outcomes data should support this notion. Outcomes
data should address common co-morbidities and concurrent therapies that may affect adherence.
+ Manufacturers do not understand the needs of employers. Discussions with employers should focus on challenges from the employer's perspective, and should present specific, actionable,
and realistic solutions. For example, an employer with a significant diabetes population wants to control the cost of diabetes
in its medical plan. This can be accomplished through a variety of means, one of which can be using the manufacturer's drug.
However, not all employees will necessarily be candidates for the drug. Working with this employer on a diabetes-specific
initiative is more helpful than developing an educational program for the drug therapy.