An important tenet of the Going Below The Surface (GBTS) Forum is fostering a dialogue among all health care stakeholders – especially if the conversation is about challenging or uncomfortable topics. Those conversations can often result in unexpected common ground or reveal paths forward for stakeholders.

That’s why we were interested in a new report from the National Alliance of Healthcare Purchaser Coalitions, a GBTS Forum partner who hosted nine regional roundtables with more than 80 employers of different sizes and industries. Private employers are the largest source of health coverage in the United States, providing insurance for about 49% of Americans, or about 160 million people. With increases each year in inflation, prices and utilization of health care, employers are especially concerned about the ongoing impact of rising health care costs not only on themselves, but on their employees as well.

Recognizing these challenges, the National Alliance hosted the roundtables “to open a dialogue about current employer perspectives and attitudes on drug pricing, contracting issues, benefit design and formulary decisions to define better value for health care strategies.”

“Employers are working to change the conversation with their PBMs, health plans and other vendors to reduce waste and fraud and implement more effective strategies that improve health while mitigating these costs,” said Michael Thompson, National Alliance president and CEO. “We convened these discussions across the country and offer the resulting recommendations to aid employers and their vendors in contracting negotiations.”

Employers shared important insights during the roundtables, including how they view “value,” which can have different meanings depending on the stakeholder. Employers define “value” in their drug spend as having “the right drug at the right price,” appropriate utilization controls to reduce waste and fraud, and implementation of strategies that clearly indicate improved health outcomes. Among other insights:

  • Current challenges for employers include understanding cost savings (55%), knowing which drugs go through the medical benefit (58%), over or misutilization of prescription drugs (61%), and various issues with PBM contracts and management.
  • For employees, the most problematic issue is high cost sharing (68%). Some employers have no intention of moving away from this strategy of high cost sharing. Others are looking to a more “paternalistic” approach to promote the best quality and cost options.
  • Effective formulary management is the overarching approach indicated by a majority of employers to best address savings and the impact of rebates will be a strategic area of focus for many purchasers moving forward.

Employers don’t expect that legislation will address their challenges; they will need to take action themselves, based on recommendations gleaned through the roundtable discussions:

  • Eliminate rebates and encourage full transparency on drug prices from PBMs, specialty pharmacies, and pharmaceutical manufacturers.
  • Implement integrated site-of-care solutions for specialty medications to reduce waste and costs.
  • Hold PBMs accountable for building cost saving strategies into drug formularies.
  • Support collaboration and information sharing across employers and coalitions.
  • Push for federal regulation of the pharmaceutical industry.
  • Help employers identify relevant value comparison tools for pharmacy (e.g., use of value frameworks and tools).
  • Recommend independent third-party audits for both PBM and medical drug management.

Going deeper to understand the concerns of different health care sectors, like employers, is key to finding solutions to addressing and lowering health care spending. To learn more about the roundtables, which were supported by way of funding from Genentech, the National Pharmaceutical Council and Pfizer, download the study from the National Alliance’s website.