Combating the Surge in Drug Costs & Obesity

In the latest episode of "Healthcare on the Rocks: Employee Benefits with a Twist," two of the authors of the 2024 Employee Health Trends report, Jennifer Jones and Janet Young, M.D., dive deep into the escalating challenges of prescription drug costs and obesity in the workplace. 

This discussion builds on Springbuk's fifth annual trends report, drawing on analysis from over 5,600 employers.

Below, you’ll find highlights and takeaways from their conversation. 
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Need a copy of the 2024 Employee Health Trends Report? Click here to download. 
Ready to listen to the full episode? Click here.

The Rising Tide of Prescription Drug Costs

Springbuk's Clinical Analytics Advisor, Janet Young, shares alarming statistics: drug costs for employers are rising at a rate that far outpaces medical costs, with no end in sight. Between 2021 and 2023, while medical costs saw a modest increase, drug costs surged by over 21%. The shift towards prescribing more expensive drugs, even for common conditions, is a significant driver behind this spike.

The Role of Brand Name and Specialty Drugs

Brand name drugs account for roughly half of the year-over-year increase in drug spending, with a notable shift towards antihyperglycemics, which include costly medications like insulin and GLP-1 agonists. 

Key Insight: Brand Name Drugs: About half of the year-over-year increase in drug spending can be attributed to higher brand name drug costs. The average cost per brand name prescription has jumped from $470 four years ago to over $700 currently. A shift towards prescribing more expensive categories like antihyperglycemics (including drugs like insulin) has driven up the average cost.

‍Specialty drugs continue to see increased usage, particularly for chronic conditions like psoriasis, inflammatory bowel disease, and eczema, further compounding employer healthcare costs. 

Key Insight: Specialty Drugs: More members are taking costly specialty drugs - nearly 1 in 50 now take at least one specialty medication. Expanded eligibility criteria from drug makers has allowed for increased utilization in areas like eczema treatment.

A Glimmer of Hope: Generics and Biosimilars

Despite the grim outlook, Janet highlights the potential for generics and biosimilars to offer significant savings. While adoption has been slower for biosimilars, their increased use could represent substantial savings given the high cost of biologics.

Key Insight: Generics & Biosimilars: Generic drugs remain significantly less costly than brand counterparts, typically 80-85% lower. Biosimilar discounts are smaller at 10-30% off reference products. While the adoption of generics is strong, biosimilar utilization lags but is growing. Upcoming generics like one for ADHD drug Vyvanse and biosimilars for drugs like Stelara present opportunities for cost savings.

Strategies for Employers to Mitigate Drug Costs

Jennifer emphasizes the importance of understanding baseline spending and PBM contracts. She also suggests: 

• Understand baseline drug spending and key drivers
• Ensure formularies and contracts favor generics/biosimilars where available
• Explore strategies like step therapy and prior authorization
• Educate members on biosimilar alternatives as they come to market
• Promote adherence and control of chronic conditions holistically

The Impact of Obesity on Healthcare Costs

Severely obese members incur almost three times the healthcare costs of those without obesity diagnoses. With the rise in drug treatments for obesity, such as GLP-1 agonists, there's potential for even higher costs unless comprehensive treatment strategies are employed.

Key Insight: Obesity's link to conditions like diabetes, cancer, psoriasis, and depression is well-known. But associated drug costs are spiking as well - up from $60 to $300 annually per obese member. Most remain untreated.

The Evolution of Obesity Treatment

The conversation underscores a shift in treating obesity, with a spotlight on GLP-1 agonists like Ozempic, Wegovy, and Zepbound. These drugs offer new hope but also come with high costs. Jennifer advocates for a holistic approach to obesity treatment, incorporating lifestyle changes alongside medical interventions.

Key Insight: GLP-1 agonists are proving effective for weight loss, but at $900+ per script, costs are prohibitive. Employers must weigh their inclusion carefully. A comprehensive approach encompassing lifestyle, nutrition, surgery (where appropriate), and, potentially, medication may produce the best results.

Strategies for Employers to Address Obesity

The key is taking a multi-pronged, individualized approach that combines programs, education, lifestyle support, and potentially medication: 

• Understand obesity prevalence and related costs in your population
• Offer comprehensive programs covering nutrition, physical activity, lifestyle counseling
• Partner with clinical programs that take a holistic approach to obesity management
• Consider including GLP-1 agonists as part of your benefits program - but weigh costs carefully
• Promote obesity medications as an investment in future employee health and retention
• Focus on incremental, sustainable lifestyle changes rather than dramatic overhauls
• Provide education on environmental/toxin exposure and impacts beynd diet and exercise
• Help members learn tools for slow, steady, long-term progress and weight loss

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Looking Ahead: A Comprehensive Approach to Health

Slow, steady progress supported by the right benefits strategy is the surest path forward. Communication and education, patience, and perseverance will be key as employers navigate the uphill battle against rising drug costs and obesity. New approaches that account for environmental and lifestyle factors offer promise.

The full 2024 Employee Health Trends Report provides in-depth data and analysis to help employers formulate effective strategies.
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See the full analysis on obesity, along with two other trends impacting employee health. Download the full 2024 trends report here.

The podcast covers even more ground on these crucial topics. Stay tuned for future insightful episodes at springbuk.com/podcast. 

Ready to listen to the full episode? Click here.