3 ways payers and providers can collaborate to lower drug costs

Healthcare providers and insurers can work together to help tackle high drug costs, according to Zachary Hafner, a partner and healthcare consultant at The Advisory Board.

Mr. Hafner listed three ways providers and payers can collaborate in a recent article for Managed Care.

1. Improve clinical management of drugs. With the drug industry rapidly evolving and constantly releasing new treatments, drug efficacy is more important than ever for both payers and providers.

"The pace of innovation and approvals puts a premium on keeping up with the incoming waves of new research, driving adherence to evidence-based protocols and engaging with patients so they follow treatment as prescribed," said Mr. Hafner.

2. Make cost containment a priority. To successfully lower costs, payers and providers must share aligned incentives.

"Payers and providers must streamline their processes, especially as they pertain to medications, and wring out unnecessary expenditures whenever possible," said Mr. Hafner. "Reducing costs can involve many levers, including standardizing therapies and negotiating prices accordingly, expanding the use of generics, exploring biosimilar alternatives and optimizing use of the 340b program."

3. Steer patients to appropriate care sites. Payers and providers must be cognizant that where and how drugs are administered influences their price.

"Costs can vary widely depending on whether a drug is administered in the physician office, at a specialty pharmacy, or at home," said Mr. Hafner. "Working jointly to steer patients to the most effective sites will boost total effectiveness and help control costs."

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