Self-funded plans allow medical and pharmacy benefits to be unbundled, which bring more negotiating power to how prescription drugs are priced and distributed.
One area in which employers can save is on specialty drugs to treat rare diseases with limited treatment options. These drugs, while effective to the patient, come at a very high cost, often due to the way they are given to a patient. Many of these drugs are injectables that cannot ordinarily be self-administered, such as chemotherapy drugs.
Under a self-funded plan, employers can work with specialty PBMs to audit their claims to determine which of these drugs, based on how they’re coded, could be delivered in a different capacity or price negotiated within the medical benefit.
For example, Keystone has worked with specialty PBMs that have saved employers significantly under their self-funded plan.
In one scenario, an employer had an employee utilizing a new injectable biologic for an autoimmune disorder. The infusion was to be delivered in a hospital setting, where the pricing included hospital and facility fees, and physician charges to administer. By working with a TPA, we were able to use their services to fill the drug and administer it at the patient’s home as a medical claim under the employer’s plan, instead of under the PBM plan. In addition, utilizing a Manufacturers Assistance Program, the patient was able to receive the drug at a $0 cost. The net savings to our client in this scenario is almost $700,000.
In the second scenario, we utilized another TPA to procure and assist in the delivery of injectables for chemotherapy, rheumatoid, and other chronic conditions. On average, the employer saved 3 times the amount of what the cost of the drug may have been if kept within the PBM contract. The net savings to our client in this scenario is almost $600,000.
Breaking the status quo of traditional PBM service models can have a profound impact on the financial health of an employer’s benefit plan, putting profits in the hands of the employer.