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About Us


Issue 2, 2017


Members Benefit Saves Big on Prescription Drugs Through BAC SavRx

The high cost of prescription drugs has been a major focal point in healthcare discussions on Capitol Hill.  In the United States, pharmacy now accounts for approximately 22% of all medical spending. This means that the cost of your medical premiums is grossly affected by the plans drug benefits. Rising prescription drug costs hurt everyone. From patients who cannot access breakthroughs and consumers who pay higher and higher premiums to taxpayers who fund public programs like Medicaid and Medicare, the consequences are profound.

Why are the prices of drugs rising so quickly? There are several factors that influence pricing. One of the main reasons for high drug prices has to do with patents on medicine. Drug manufacturers in the U.S. can hold a patent on a drug for 20 years, and during that time it is legal to raise the price whenever they want. For example, an analysis of prescriptions filled by privately insured people under age 65 found that patients’ out-of-pocket spending for EpiPens climbed 535% from 2007 to 2014, and the number of annual EpiPen prescriptions almost tripled. But the number of prescriptions filled by each patient barely changed. This suggests patients’ costs rose due to price increases, not because people started using more EpiPens, said lead study author Dr. Kao-Ping Chua, a public health researcher at the University of Chicago.

Another reason is direct advertising. Commercials for prescription drugs bombard the senses, pressing us to “ask your doctor” about the latest pill. Meanwhile, patients often have little say in what they are being prescribed. Rather, doctors, who make the decision for us, are the beneficiary of direct marketing from the drug manufacturers. In fact, marketing to healthcare providers is a huge part of any pharmaceutical company’s budget, because doctors often prescribe the medicine they are most familiar with. According to AARP, drug companies spend $24 billion a year on marketing efforts for doctors and other healthcare workers, in hopes that they will prescribe that company’s drug more often.  

Group health plans purchase prescription drug coverage largely through Pharmacy Benefits Managers (PBMs).  PMBs have been in the news lately as drug manufacturers are attempting to shift the blame for high cost drugs to these “middle men”.  Pharmacy benefits managers, like SavRx, Express ScriptsCVS Caremark, and UnitedHealth’s OptumRx, negotiate rebates on behalf of clients, including insurers and employers. They wield power in the form of formularies – plans that rank drugs in tiers that determine how much patients end up paying out of pocket.  Drug companies argue that PBMs have incentives to drive list prices higher, because part of how they make money is based on the size of the rebates they negotiate. During an appearance on CNBC’s “Closing Bell,” Stephen Ubl, the CEO of PhRMA, said that PBMs “are negotiating a harder and harder bargain.” He went on to say “rebates and discounts have nearly doubled over the last few years alone, and those rebates are not making their way to patients at the point of sale, and we have to ensure, particularly with more Americans in high-deductible plans that are finding themselves having to purchase insulin for chronic disease, for example, that they’re able to access the same discounts that insurers and PBMs are negotiating for everyone else."

However, the study commissioned by the Pharmaceutical Care Management Association says that 90% of the value of the rebates are passed along to companies that sponsor health plans and to consumers. A high quality PBM can make a real difference in your benefits. Good plan governance looks at the PBM contract to ensure that they are getting the best deal for their members.

There are 61 BAC Locals whose health funds participate in the BAC SavRx, a prescription coalition with the International Brotherhood of Electrical Workers (IBEW), which results in significant savings by being part of a larger group. In 2017, SavRx performed their yearly market check and improved rates by increasing discounts and removing dispensing fees. This resulted in almost $400,000 annual savings for the BAC International Health Fund (IHF) as well as significant savings to other participating funds. It also allows the IHF to keep members’ drug copayments as low as $5 for generic drugs and keep brand drugs affordable. In addition, by administering the clinical programs such as prior authorization and step therapy, SavRX pharmacists make sure that BAC members are being prescribed the right drug as safety and efficacy rules are followed.

As a BAC member, what can you do? Understand your prescription drug benefits plan design. Bring your formulary to your doctor’s office so they know where the drug you are being prescribed falls. Ask for generics when available. Take your medications as prescribed. Order your prescriptions through a mail order; often you can get a three-month supply of drugs for the price of two. Finally, attempt to access manufacturers’ coupons and rebates. Very often drug manufactures have financial assistance and other programs to assist you with obtaining your medication. Ask your PBM or pharmacist.