The annual Pharmacy Benefit Management Institute (PBMI) conference offered a wide variety of insights on the future of the healthcare industry. In one presentation, Greg Warren, Partner and Consulting Actuary at Axene Health Partners (Axene), shared his views on the prescription drug challenges and their solutions that could bring value to the industry.
In general, the U.S. healthcare system is fraught with escalating costs and fragmentation, with growing political pressure to rein in care and medication expenses for patients and payers. Highlighting that none of the numerous solutions proposed to help a diverse array of stakeholders offer a comprehensive solution to the industry’s ills, Warren argued that bringing stakeholder incentives into alignment, as well as promoting transparency and encouraging competition, would help address increases to the total cost of care.
The pharmacy benefit management industry in general, he claimed, features a wide variety of prices, fees, discounts, and rebates, all calculated in diverse and inconsistent ways, as well as a wide range of acronyms used that create a system that is not clearly understood by its professional practitioners, let alone easily navigated by patients forced to balance care needs against their financial means. Warren suggested that in order to be successful, any solution must bring greater clarity and understanding and address misaligned incentives.
Biosimilars were floated as one possible solution to a specific area of prescription drugs, along with the prediction that plans will develop new benefit designs and financing mechanisms to take greater advantage of savings the technology offers, much in the way generic drugs shook up the market nearly two decades ago.
Warren also cited pricing transparency as a key mechanism to improvements, mentioning state and federal legislative and regulatory efforts to lower costs and help patients more easily bear the financial burden of often extraordinarily expensive medications, citing the Inflation Reduction Act’s provisions to cap insulin costs and provide greater drug price negotiation powers as a means to lower costs at the expense of greater innovation.
Lastly, Warren shared his view of prescription medication value through the lens of a professional actuary, suggesting additional measures to determine the value of drugs, such as activities of daily living, quality adjusted life years, and pain levels, ultimately arguing that making people healthier will reduce overall care expenses in the long run.