While most employers can equate higher drug use with higher costs, it looks like the latest study might prove them wrong.
EmpiRX, a pharmacy benefits manager, found that behavioral health-related medications led to a nearly 10% increase in pharmacy claims from its customers. But while the use of drugs for mental health needs have increased in recent years, employer costs have not. In fact, EmpiRX experienced a nearly 5% drop in plan spend per user; in other words, employers saved money despite employees seeking more pharmaceutical care.
“It all comes down to our model,” says Karthik Ganesh, CEO of EmpiRx Health. “We’re moving from higher-cost drugs to lower-cost, clinically appropriate drugs. We’re not allowing patients to take multiple drugs that work against each other. We’re buying for value, not volume.”
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EmpiRX is a value-based PBM, which means they only earn a profit if they save the employer money in a given year. Ganesh cautions employers to be wary of traditional PBMs, which often offer discounts without any guarantee of lower total spend.
“The only way a PBM can work with a manufacturer and get bigger discounts is by promising the manufacturer more volume,” says Ganesh. “We have a highly volume-driven health care system because more patients and more utilization generally means more money. But we’ve completely lost track of the fact that more is never better.”
A study published in the Journal of the American Medical Association found that 25% of health care spending, or nearly $1 trillion, is wasted due to factors such as poor care coordination among health care providers, overtreatment, and unnecessarily expensive drugs. Ganesh and his team are working to minimize that waste for their clients by connecting with physicians to identify the most cost-effective medication for their members.
“It’s not just that we arbitrarily say what a patient needs,” says Ganesh. “It’s us working with physicians and figuring out what a patient doesn’t need and lower-cost alternatives. We can come up with a multitude of answers.”
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This has made a world of difference in employer health plans and employee health. The EmpiRx data also revealed a 93.5% medication adherence rate, meaning employees can afford to take their prescribed medication. Notably, EmpiRx antidepressant utilization increased by 12%, while gross spend per claim decreased by nearly 2%, and ADHD medications increased by 20%, while gross spend decreased by 9 %.
However, increased utilization is not always good. Drug overdoses increased nearly 30% in 2021, with opioids accounting for the majority of deaths. EmpiRx, on the other hand, reported a 10% reduction in opioid utilization in the same year. In addition, the PBM noted a 14% increase in patients seeking treatment for opioid use disorder.
“Our care model is essentially hand-to-hand combat,” says Ganesh. “We have our doctors working directly with patients to make sure they stick to their medications or seek the right treatment. But it’s still heartwarming to see our patient base reaching out for help.”
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Ganesh notes that it is especially vital for EmpiRx to keep up with mental health needs in the face of the pandemic. He predicts that struggles with anxiety and isolation will continue, and utilization rates are unlikely to waver. Ganesh stresses that hesitancy to act will only make things worse. According to the American Psychiatric Association, the American economy loses more than $200 billion a year in absenteeism, reduced productivity, and medical costs associated with untreated mental illness.
Ganesh encourages employers to challenge their benefits consultants and rethink their relationship with the pharmaceutical industry. Employers may not be able to afford to maintain the status quo.
“As a society, we should step up and support anyone who is struggling from a mental health standpoint,” he says. “It’s the right thing to do as humans, but it’s also the right thing for everyone’s pockets.”
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