Prescription drugs are an essential part of your employee’s health and wellness, but they can also be a major expense for your group benefits plan and your budget. The cost of your prescription drugs depends on several factors, including the type of drug, the pharmacy you choose, and your plan design. On average, eligible amounts per claim increased by 8.9% since 2021, driven by traditional drugs and specialty drugs, further driving up prescription costs. This article shares some tips and strategies on how to reduce your out-of-pocket expenses and help your group benefits plan stay sustainable and affordable.
1. Choose Generic Drugs When Possible
Generic drugs are equivalent to brand-name drugs in terms of quality, safety, and effectiveness, but they are usually much cheaper. This means that by choosing generic drugs, plan members can save a lot of money without compromising their health outcomes.
Most group benefits plans have a mandatory generic substitution policy, which means that if the generic version of a drug is available, your plan will only cover the cost of the generic drug. However, some plans may allow members to request an exception if their doctor provides a valid medical reason why they need the brand-name drug. In that case, they may need to go through a prior authorization process to get approval from your insurer.
2. Compare Dispensing Fees and Drug Prices
Another factor that affects the cost of prescription drugs is the dispensing fee, which is the fee that pharmacies charge for filling prescriptions. This fee covers various services that the pharmacist provides, such as counselling, dispensing, stocking, compounding, and operating costs. Your insurance plan may only cover a certain amount for dispensing, the rest of which plan members pay out of pocket. Dispensing fees vary widely among different pharmacies, and they can add up to a significant amount over time.
For example, based on the data from Canada Life, the average dispensing fee for the top Alberta pharmacies from 2021 ranged from $3.99 to $12.17 depending on the pharmacy. Dispensing fees can also vary based on provincial drug program fee caps, type of pharmacy (chain vs independent) and how many other pharmacies are nearby (local competition). This means that if a member fills a prescription every month, they save some money by choosing the pharmacy with the lowest dispensing fee.
In addition to dispensing fees, plan members may also want to compare the drug prices among different pharmacies, especially for high-cost specialty drugs. Some pharmacies may offer discounts or price-matching for certain drugs, or they may have preferred provider networks that can offer lower prices for plan members.
To compare dispensing fees and drug prices, members can use online tools such as Pharmacy Compass, or call different pharmacies and ask for quotes. It is recommended to also ask pharmacists if they can offer a lower price or match a competitor’s price.
3. Review Your Plan Design and Coverage Options
Another way to save money on prescription drugs is to review your plan design and coverage options and see if there are any changes or adjustments that can be made to optimize benefits savings.
For example, you may want to check if your plan has a maximum drug claim limit, which is the maximum amount that your plan will cover for prescription drugs in a given period. If a plan member reaches this limit, they will have to pay the full cost of their drugs out of pocket. To avoid this situation, you may want to consider increasing your maximum drug claim limit or switching to a plan that has no limit or a higher limit.
Another option to consider is enrolling in a government-subsidized drug program, such as the Alberta Health Non-group Program, which can help pay for some of your prescription drugs that are not covered by your group benefits plan. This can be especially helpful with chronic conditions or a rare disease that requires expensive drugs.
To review your plan design and coverage options, you can leverage your benefits administrator or consultant to find the best solution for your needs and budget.