Missed rebate opportunities dog medical benefit

Drug management under the medical benefit is lagging the pharmacy benefit.

“At least 50 percent of drugs are dispensed under the medical benefit, and it’s often an area for financial opportunity, yet it’s the least managed,” says Brenda Motheral, MBA, PhD, executive director of the Pharmacy Benefit Management Institute.

The 2013 Specialty Drug Benefit Report from the institute says this is also evident when it comes to specialty drug rebates.

There is a big disparity between rebates under the medical benefit compared to the pharmacy benefit, she says.

Many factors contribute to the disparity, but the most important is that there are greater amounts available under the pharmacy benefit — “even though the amount spent on specialty drugs under the pharmacy and medical benefit are relatively even,” she says. “It’s a bigger gap than what’s warranted.”

Employer size is also a factor.

Brenda Motheral, MBA, PhD

“Nearly 50 percent of large employers have guaranteed specialty rebates. Compare that to only about 15 percent of small employers,” she says. Small employers are defined as 5,000 lives or less, according to the report.

The type of rebate arrangement varies between large and small employers, as well, with larger employers 24 percent more likely to have a flat guaranteed rebate amount per specialty prescription.

In contrast, 30 percent of smaller employers receive a smaller amount with no guarantee. That leaves a lot of money on the table.

In addition, only 19 percent of employers say they receive rebates for specialty medications filled under the medical benefit, 62 percent say they do not, and 19 percent don’t know.

The report says that there is little difference between large and small employers.

Health plans can help by providing rebate information to their employer clients, especially small ones. Human resources offices often don’t know what’s available, or they don’t ask the right questions, says Motheral. For employers, this is often a case of you don’t know what you don’t know.

“Health plans are hit and miss right now on the extent to which they have pursued these rebates, and it is a growing opportunity.”

Type of pharmacy benefit rebate arrangement by employer size

Source: 2013 Specialty Drug Benefit Report, Pharmacy Benefit Management Institute

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