When your benefits advisor sits down with you each year for renewal, what do they actually show you?
Many employers walk away from those conversations knowing their premium went up, maybe which carriers were shopped, and what the new employee contribution looks like. That is about it.
Here is what rarely makes it into the conversation: which specific medications are driving your pharmacy spend.
The shift that snuck up on many employers
Pharmacy used to represent about 12% of total health plan costs. For many groups today, it is closer to 20-25%. And for some employers, it has crossed 50%.
It is one of your largest cost drivers, and for many employers, it is going completely unreviewed at the medication level.
If your advisor is not showing you your top 20 most expensive drugs, your biggest claim categories, and what is actually happening inside your PBM contract, you are likely overpaying without knowing it.
What a closer look can reveal
We recently completed a pharmacy assessment for a group with 1,500 employees. Looking at just six medications, we identified more than $1,000,000 in potential savings, without disrupting a single employee’s medication or coverage.
The difference came down to pricing, sourcing, and oversight. Not plan design changes. Not cost-shifting to employees.
A real example closer to home
We worked with a manufacturer with 240 employees spending $1.8M annually on their health plan. Pharmacy made up 32% of that, about $576,000 per year.
Their previous broker’s recommendation? Accept the renewal increase and shift more cost to employees.
We took a different approach and audited the PBM contract instead. What we found: $340,000 in annual waste. After restructuring the contract, they saved $290,000 in year one. No disruption to employee medications. No changes to their plan design.
A few questions worth sitting with
- Have you seen a breakdown of your top 20 most expensive medications?
- Do you know which drugs are having the biggest impact on your plan?
- Are you reviewing actual pharmacy claim data, or just looking at renewal numbers?
If no one has walked you through this level of detail, that is worth paying attention to.
Many advisors do not go this deep because it requires more work and a willingness to challenge the PBM relationship. It is easier to focus on premiums and move on.
We do things differently.
DM me for more information, happy to take a look at what is happening inside your plan.