Brokers Weigh In on Prescription Drug Benefits
With continually rising costs over the past decade and new formulations (e.g., anti-obesity medications) receiving FDA approval, prescription drug benefits are top of mind for brokers and employers.
A recent 38-question survey on prescription drug benefits conducted by McKinsey in partnership with the Council of Insurance Agents & Brokers in the first half of 2023 helps reveal current trends, pain points, and opportunities in this market. One hundred survey responses were received from brokers and benefits advisors at multinational, national, regional and independent brokerage firms, which informed the insights provided here. The 2022 McKinsey Employer Healthcare survey and 2022 McKinsey Consumer Health Insights survey are also referenced in this article to provide additional data and insights.
- Broker respondents reported that employers are seeking improved offerings to address both prescription drug costs and member experience; however, cost-focused solutions are overall the highest ranked, and many of the solutions in which brokers reported employer interest suggest that a key element of experience is member out-of-pocket cost.
- Brokers reported growth of about 10 percentage points or more over the five years in several offerings that aim to address prescription drug costs, including both solutions facilitated by traditional pharmacy benefit managers (PBMs) (e.g., step therapy, mandatory specialty pharmacy networks) as well as those that bypass traditional PBMs (e.g., use of a transparent PBM or a carve-out to source specialty drugs from a non-PBM).
- Employers continue to pursue both carve-in and carve-out strategies for contracting with PBMs, and brokers reported that a majority of employers pursuing both strategies believe they are making the most cost-effective choice.
- Although brokers reported that cost considerations weigh heavily in the prescription drug benefits offerings employers choose to adopt, when choosing which broker to work with, employers give more weight to experience and service level than cost considerations.
- Brokers self-reported that operating models differ based on brokerage size, with multinational brokerages more likely to have a structured process for choosing a PBM partner and more likely to drive uptake of innovative offerings by employer clients and regional brokerages more likely to report long-standing clients.