How Employers Can Save on Pharmacy Benefits

According to a recent survey conducted by the National Alliance of Healthcare Purchaser Coalitions more than 60% of employers say drug and medical spending is unsustainable for their business.

In this blog post we explore various ways North Carolina employers can reduce costs and improve outcomes and service for their employees with respect to pharmacy benefits.

As Vinay Patel, PharmD, CEO of MakoRx says:

“What makes me get up every morning is that there are thousands of people that need as much help controlling healthcare costs as their actual health. As a pharmacist, I’ve seen patients come through our doors and get overcharged for drugs, as well as their employer’s plan, and we are helpless to do anything! It is all controlled by the insurance card the employee has in their wallet. We like the way Hero Health helps employers take back control. And MakoRx helps do just that!”


What’s the Difference? Part I

The biggest difference between having a carrier-backed insurance plan and a self-funded plan comes down to cost and control.

As a self-funded plan sponsor, you don’t only control your healthcare data and what can be done with it, but you also get insight into that data. What this ultimately means is that you can see where the drugs are being filled, exactly what they cost, as well as the amount you are paying to pharmacies.

On the other hand, when you are in a carrier-backed model you do not get the same visibility into your data – so you have no idea as to why costs are increasing every month and therefore no control over what to do about it.


What’s the Difference? Part II

The difference for the member is being proactive, meaning that with self-funded plans you are getting the data which allows you to see where those costs are going.

By driving members to value-based, high-quality care centers in their preferred pharmacy network, they receive the personal touch that those independent local pharmacies provide. And in the end, it also gets all of us closer to where we want to be – which is lower overall healthcare costs.


Transparent Benefits Model

One of the benefits of a transparent benefits model like MakoRx via Hero Health for you as the employer is that now you know exactly what these drugs cost. And when you see how little some of them cost, from pennies to a few dollars, you may decide to provide them to your members at no cost – this can help chronic conditions from worsening or getting out of control or even exacerbating outcomes later on. This list of drugs is known as the “zero dollar preventative care list” which you may want to offer now that you know the exact cost. As opposed to the status quo model where there’s a ton of money being made on these drugs with plan sponsors being severely overcharged.


The Drug Formulary – The Driver of Rebates, Discounts, and the Cost of Drugs

The drug formulary or the list of medications that should be taken by your members is essentially what drives rebates, discounts, and the cost of drugs at a high level.  The good news is that MakoRx has implemented a model that moves away from rebates.  What this means is that plan sponsors don’t need to wait 12-18 months to get a rebate check for something they already overpaid for.  Instead, MakoRx begins with a net cost model which means that if there is a generic drug available, that it is tried first which results in your members benefiting from lower costs at the pharmacy counter.  By moving away from rebates, employers are able to realize those cost savings in the month their employers use the drug rather than somewhere down the line.


Access to Every Pharmacy in the Country!

Having the MakoRx card via the Hero Health plan, means that employees have access to every pharmacy in the United States. All of those pharmacies have been divided into two tiers:

Preferred Network – which are the community-owned, independent community pharmacies which amounts to over 16,000 locally-owned pharmacies across the country which employees can utilize.

Other Pharmacies in the Network – these are all the other standard pharmacies in the network that members can access (including their discounts). It is up to the members to choose between convenience (perhaps it’s just around the corner) or access to the preferred network through the local independent network.


The difference Between Community-based Locally-owned Pharmacies Versus Chain or Retail Pharmacies

Patel points out there are three things that could potentially differentiate community-based locally-owned pharmacies from chain or retail pharmacies:

  1. A personal level of touch that you don’t always receive at chain stores.
  2. Locally-owned independent pharmacies have access to the same pricing as national chain stores so you get the benefit of that pass-through pricing that you may not get with a chain store.
  3. A sense of proactiveness or high-quality care as the community pharmacist will more often than not take the extra time to proactively deal with a health issue they may see on your medication record.


Addressing the Largest Category of Cost Within Pharmacy

The highest rising cost category in pharmacies is specialty drugs which MakoRx addresses in a couple of different ways:

  1. Getting access to specialty drugs from only one specialty pharmacy won’t give members the best cost. So, what MakoRx has done is partnered with many specialty pharmacies in their network which means members have access to all of the competitive pricing enabling them to find the best price for these specialty products.
  2. Access to the manufacturer direct program which gives those members who qualify financially access to specialty medications at greatly reduced costs direct from the manufacturer.


Patient Assistance Programs

When MakoRx sees in their claims system that a member has filled a specialty product prescription at a pharmacy, they will proactively reach out to that patient. For example, products which are above $1,500 will trigger their claim system and their representatives will reach out to the patient to let them know they have access to programs that will reduce the cost of their medication and help them apply to these programs.


Educating Patients

The patient education portion of MakoRx which is embedded into Hero Health Plans begins with the preferred pharmacy network where those pharmacists educate the members on all of the drugs that they take – their purpose, potential side-effects, how to maximize effectiveness, and so forth.

The next level of education comes at a network level where MakoRx, through the data they analyze, can proactively reach out to patients regarding the drugs they are taking so that they can get the best use out of what they are being prescribed.

All of this adds up to a more informed patient and a healthier, more productive employee. As Patel says:

“By moving to plans like Hero Health and MakoRx, your employees will enjoy better health outcomes and better incomes, too!”




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