Once in a blue moon, the U.S. government allows the implementation of a program that affords employers the opportunity to save money without inconveniencing employees. While you process that statement, think of what your current spend is on pharmacy. What just a few years ago was a small percentage of your medical cost may now occupy a higher percentage of the total spend without a cost control method in sight… until now. The creation of a new company called OwnRx has two programs it offers that make the cost of medications less expensive and the purchase of prescription medications completely transparent.
The two programs available through this company are Acquisition Cost Index (ACI) and Own Use. ACI is available to all employers and offers the ability to purchase medications at their actual cost. This allows for transparency in the purchase price of each prescription possible and completely changes the way the purchase of medications occurs. A pharmacy benefit manager (PBM) determines the daily average cost of each medication, which is what the employer will pay for the medication (cost of the medication and a dispensing fee). To determine how this program could benefit an organization, the previous 12 months of the pharmacy claims would be gathered and analyzed to determine what the organization actually paid versus what the organization would have paid had it participated in the ACI program. The results are then broken down into medication categories such as generic, brand, non-formulary and specialty. This savings can range between 5% - 15% depending upon the types of medications dispensed and the retail pharmacy through which they are purchased. Program participants will receive 100% of manufacturers’ rebates and implementation of this program usually takes approximately 90 days, which is a quick turnaround.
The Own Use program is limited in applicability, but if you as an employer are a school system, public university, church, non-profit organization or hospital, your participation in this program can result in savings between 15 and 25%. This program is not new, but OwnRx is the first company to implement the necessary processes to make this program viable. The program grants local non-profit hospitals a federally-designated class of trade allowing it to purchase medications at a reduced cost which they can then dispense, through an authorized pharmacy, at that reduced cost. The pharmacy benefits manager administers this program and a third-party administrator verifies that those who participate in the program are eligible. Having each step in place allows a seamless process for the employees and alleviates the burden of the hospital administering the program itself. Implementation of this program takes approximately one year, granting more time for all contracts to be executed and for information to be provided to all employees.
These programs afford the possibility to offer excellent coverage for employees while saving money and bringing transparency to an aspect of health insurance that has many hidden costs.