In this Q&A, Joe Dorazio, Small Group Head of Sales – at Aetna®, a CVS Health ® Company, addresses common questions about workplace benefit strategies from employers in the region. These business owners and HR leaders are trying to balance cost and coverage to offer health plans that create value for their employees amidst a challenging market environment. He discusses how flexible health insurance solutions from Aetna can help employers strike this critical balance.
Q: How are shifting employee needs and expectations influencing employer strategies around health care benefits?
Dorazio: Pharmaceutical advancements continue to expand treatment options for chronic and complex conditions and employees are paying closer attention to the benefits their companies offer. This is especially true when it comes to prescription drug coverage. Employee demand for innovative medications like GLP-1 agonists and biologics, which both rank among the top 10 most expensive drug therapies, is surging.
For employers, this means that offering competitive medical and pharmacy benefits is an essential part of attracting and retaining top talent. Data shows pharmacy benefits have become an important consideration for workers when evaluating a job offer—nearly eight in 10 people factor or may factor them into an employment decision. Businesses, already squeezed by high medical costs, must now contend with rising employee expectations and high pharmaceutical prices. In fact, pharmacy is the fastest-growing segment of health care spending, a trend that is expected to continue.
This puts businesses in a difficult position. Fortunately, Aetna provides flexible benefit options and innovative solutions that help employers strike the right balance between cost management and comprehensive coverage, including pharmacy benefits. Our plan options make it easier for companies to optimize their overall health care spending, deliver value for employees and ensure care stays affordable, which is good for business.
Q: What key factors are behind rising pharmacy costs?
Dorazio: While overall health care costs are expected to climb by 4.5 percent per capita in 2024, prescription drug spending growth is projected at 10 to 12 percent. There are two main reasons for this.
The first is the increased use of specialty drugs. Designed to treat complex, chronic, or rare conditions like cancer and rheumatoid arthritis, these medications require special handling and oversight which makes them extremely expensive. Although they are only prescribed to about two percent of the population, specialty medications account for over half of all prescription drug spending.
The second factor contributing to rising costs is the rapid expansion of GLP-1 use, particularly in treating type 2 diabetes and obesity. While GLP-1 drugs are expensive—typically costing between $900 to $1,350 per month—so are the consequences of poor metabolic health. Metabolic disease, which includes conditions like diabetes and obesity, costs U.S. employers billions of dollars each year. However, since GLP-1 medications offer the potential to reduce long-term health risks and lower overall medical and pharmacy costs, their significant short-term expense has led some employers to reconsider their coverage options.
Q: What options do employers have to control pharmacy spending without compromising employee satisfaction?
Dorazio:Finding the right balance between managing costs and offering comprehensive coverage isn’t easy, but it’s critical for employers. Many of our customers have successfully adopted two key strategies to control their health care expenses.
The first involves integrating medical and pharmacy benefits under a single health plan, which gives businesses a more complete view of their overall spending. This all-in-one approach also allows Aetna to offer employers robust data insights that can help drive efficiency. For example, we can proactively engage employees who may need outreach or medication-related support.
The second strategy is flexible benefit design. Every business is different, which is why Aetna allows employers to tailor their plans to meet their specific needs. We offer advanced utilization management and different formularies to control spending. Plus, our range of multidisciplinary services, such as personalized nutrition counseling, medication management and virtual care, help boost employee satisfaction. This gives your business more tools to keep costs in check, even for high-priced medications like GLP-1s.
Q: High drug prices impact employers and employees alike. What unique programs does Aetna have to help manage pharmacy costs?
Dorazio:We’re backed by the vast resources of our parent company, CVS Health, which means Aetna customers and their staff get the latest and greatest innovations designed to optimize plan performance.
For example, thanks to programs like TrueCost™, your business gets greater pricing transparency through drug level, net cost pricing guarantees while members feel reassured that pricing better reflects the cost of the drug. Along these same lines, employees can lock in the best generic medication prices and save on out-of-pocket costs at the pharmacy counter via Cost Saver™, powered by GoodRx®.
Aetna is also focused on delivering value for specialty drugs. We’re accelerating access to biosimilars, which are FDA-approved alternatives to biologics that are just as effective but much less expensive. Co-producing new products through Cordavis™ helps your organization and your employees spend less on necessary medications.
Finally, PrudentRx also improves the value equation for specialty drugs, giving employers more control to manage their pharmacy benefits while lowering out-of-pocket costs for employees.
Q: What else should employers consider as they plan for future workplace benefit strategies?
Dorazio:As pharmaceutical innovations continue to enter the market at breakneck speed, pharmacy benefits will only become more important, especially considering the diverse population of New York. Employers should continue to evaluate whether their workforce has access to the right mix of medical and drug coverage to keep their teams healthy, engaged and productive.
To take your health plan to the next level, contact your Aetna® representative or visit Aetna.com.
