Plan sponsors are constantly waging a war on unnecessary drug spend and waste due to the inclusion of non-essential drugs on their PBM’s formulary or preferred drug list. Non-essential drugs can be described as having high costs yet little to no additional clinical value over alternatives. As more and more of these non-essential drugs continue to infiltrate the marketplace, the problem is expected to worsen.
There are three primary categories of non-essential drugs that contribute to formulary waste:
Taking preemptive action against waste
The traditional PBM model is not set up to address the issue of waste—Oftentimes, the model contributes to it. However, when armed with the right information, plan sponsors can take the lead in addressing this issue with their PBMs in order to minimize waste.
Access to data and continual vigilance is required, which means reviewing pharmacy claims and prescription data to identify current non-essential drug utilization. It also means tracking the drug pipeline to pinpoint future market entrants. A plan sponsor should also ask their PBM which specific measures they are taking to reduce waste under their current formulary and to mitigate future challenges.
PSG proactively identifies these problem drugs by continuously monitoring drug pricing and our clients’ data to identify new non-essential drugs. This intelligence is captured within our Artemetrx rules engine so that we can quantify the number of utilizers, total plan costs, and potential savings. We have identified thousands of unique drug NDCs that result in unnecessary waste for clients. But we don’t stop once the problem is identified. We work with our clients and its PBM to make needed adjustments to the formulary or plan and avoid the inclusion of non-essential drugs.
Contact PSG for a consultation today or download PSG’s solution overview to learn more.
Renee Rayburg helps lead Artemetrx services in Clinical Consulting with more than 23 years in pharmacy and medical benefit management to support our health plan sponsors, providers, and patients. Her thought leadership and passion for specialty pharmacy continues to influence the market, including important changes to specialty vendor clinical management products for the betterment of clients.
Tracy Spencer is a recognized industry leader with more than two decades of pharmacy and medical benefits experience developing and expanding relationships with C-suite and executive leadership of numerous Fortune 100 companies.