Employers are seemingly worried as hell about their health care costs, and they’re not willing to take it anymore. That seems to be the message of a new purchaser survey by the National Alliance of Healthcare Purchasing Coalitions.
The National Alliance surveyed employers in the fall of 2024 and published the results on October 29, 2024. Based on 188 responses from private and public employers and purchases across the country, they found that employers are trying to engage more aggressively on the pharmacy benefit and on biosimilars in particular.
Eighty-five percent of those responding to the survey agreed that rising healthcare costs will result in further cost shifting to employees. Thirty-eight percent strongly agreed with that statement. However, that might put corporate executives between a rock and a hard place, to the extent that further cost shifting may be extremely difficult to sell to workers. As a result, three-quarters believe that this will result in fewer wage hikes.
The nearly universal answer to the question “What are the greatest threats to affordability?”: Drug prices were mentioned by 99%, followed by high-cost claims (84%), and bloated hospital prices (79%). Fifty-five percent specifically pointed to PBM conflicts of interest as a threat to affordability.
We have reported in the past on employers’ recent reevaluation of their relationships with PBMs and how this reapproachment is partly due to the PBM’s action in covering adalimumab biosimilars. Certainly, the furor over GLP-1 drugs and their use in weight management is igniting greater fears of health benefit affordability today. Fifty-two percent of the organizations surveyed are considering changing their PBM in the next one to three years, because they are seeking greater transparency in terms of pricing and contracting. The lack of transparency complicates their ability to evaluate whether they are receiving the best deal on medications. In other words, they are worried the PBM conflicts of interest are interfering with their own ability to manage higher drug costs.
Overwhelmingly, the employers are looking to biosimilars to help control costs. About 60% of the respondents indicated that they are already promoting and including biosimilars on their formularies. A total of 95% indicated that they are already employing this strategy or will do so by 2027.
Half of those responding do not have confidence in the conflicted position of their PBM. Concerns over conflicts of interest by PBMs are also propelling worries over employers’ fiduciary requirements; this has been driven home by recent lawsuits against employers (brought by current or former employees who do not believe that the company is acting in the best interests of their workers’ healthcare). Ninety-four percent claim that they were either conducting full independent audits of their PBM contract and rebate arrangements now or within three years.
The National Alliance reported that 12% of respondents have engaged with a PBM that offers some degree of transparency; 72% of the respondents are still contracted with one of the big three (CVS Caremark, Express Scripts, or OptumRx).
The surveyed group consisted of companies below 1,000 workers (24%), 1,000-9,999 workers (40%), and larger corporations (36%).
