Can employers lower drug spending by limiting PBM involvement in health plans? 4 thoughts

While U.S. drug spending has steadily climbed in the past decade, Caterpillar has managed to lower costs associated with its employee drug plan by shifting reliance away from pharmacy drug benefit managers, reports Bloomberg.

Here are four things to know.

1. Ten years ago, Caterpillar — a leading manufacturer of construction equipment — assessed its employee drug plan and estimated as much as one-fourth of its $150 million drug spending was wasted, according to the report.

2. Instead of using PBMs, the company created its own list of drugs to offer health plan members and negotiated deals with pharmacies. Caterpillar also promoted the use of generic drugs — instead of costly heartburn and cholesterol drugs — and also hired its own pharmacists and physicians.

3. Since implementing these changes, drug spending has dropped both per patient and per prescription. Caterpillar now saves $5 million to $10 million a year on cholesterol-lowering drugs alone, according to Todd Bisping, a global benefits manager at the company.

4. While the company still uses the OptumRX to process claims and get rebates, Caterpillar's strategy fuels the recent claim that PBMs are a major source of high drug costs in the U.S., reports Bloomberg.

More articles on supply chain:

Lawmakers seek to accelerate approvals with Reauthorized Generic Drug User Fee Act
Physician avoids high cost of EpiPens with homemade device
4 latest FDA approvals

Copyright © 2023 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Featured Whitepapers

Featured Webinars