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SUBSCRIBEAs we enter 2024, several pharmacy benefit trends are capturing the attention of brokers and plan sponsors. From new drugs classes like GLP-1s and biosimilars, to legislative changes and AMP cap provision updates, staying on top of evolving dynamics in pharmacy is critical. Below are 5 key pharmacy trends to watch in 2024.
1. Spotlight on GLP-1s for Diabetes and Weight Loss Management
In 2023, GLP-1s (Glucagon-like Peptide-1) medications became a household name, especially for the plan sponsors covering these drugs. With their potential to support blood sugar regulation, aid in weight loss, and reduce cardiovascular risk, GLP-1 agonists are expected to continue their blockbuster growth in 2024.
As payers increasingly seek to cover this class of drugs, utilization management strategies within the pharmacy benefit can help contain GLP-1 spend, such as quantity limits and step therapy. Plan sponsors should closely track patient utilization of this medication class, understanding the gross/net cost to the plan, the number of total utilizers, and the number of overall claims, to inform future plan design. Read more about how plan sponsors can manage the impact of GLP-1s on pharmacy spend.
2. Biosimilar Adoption – A Focus on Humira Alternatives
Biosimilars, which are lower-cost alternatives to higher cost biologic drugs, captured the spotlight in 2023 as multiple biosimilars were approved and launched, including the first drug parallel to the costly blockbuster drug Humira. However, adoption for Humira biosimilars was slower than anticipated, with only 2.4% of overall Humira biologic claims replaced by biosimilars.
Moving into 2024, plan sponsors will need stay on top of the evolving biosimilar landscape and associated pharmacy coverage, as PBMs may treat and cover this new class of medications in a variety of ways. As employers look ahead, transparency with their PBMs will be critical to developing a biosimilar coverage strategy. When optimizing for biosimilars in 2024, plan sponsors should consider a variety of strategies to navigate biosimilars, including optimizing their pharmacy contract terms, plan design, utilization, and delivery channel.
3. The Rise of Self-Funding in Healthcare Plans
Healthcare costs are expected to rise 5.4% to 8.5% in 2024 due to medical inflation, demand for costly weight loss drugs, and increased availability of high-priced gene therapies. Plan sponsors are choosing to move from fully-insured health insurance coverage model to a self-funded model, underscored by the desire for more pharmacy contract control. In fact, in 2022, 65% of companies were self-funded, up from 48% a decade ago. By switching to a self-funded model, employers can drive more plan flexibility and transparency, often having more control over their costs. Self-funded plans also have the ability to partner with pharmacy contracting experts to help optimize and monitor their PBM contract, ensuring they are getting the best pharmacy deal possible while holding their PBM accountable.
4. The Impact of AMP Cap Removal on Plan Sponsors
The Average Manufacturer Price (AMP) represents the average price that wholesalers and other large purchasers pay to manufacturers for prescription drugs sold to retail pharmacies. Previously, AMP had been subject to a cap, limiting the maximum rebate that pharmaceutical manufacturers were required to pay to Medicaid for a given drug to 100% of the drug’s cost. However, as of 2024, an American Rescue Plan provision eliminates that cap entirely. This shift will likely impact drug pricing, reimbursement models, and overall cost structures.
With the start of 2024, plan sponsors must closely monitor the effect of the AMP cap removal and engage with their PBM to understand the impact, including reviewing contract language, requesting projected rebates, exploring additional formulary options, and understanding rebate credits.
5. Legislative Winds of Change: PBM Transparency
Legislation around PBM transparency continues to gain significant momentum, including national attention from the White House and Congress. Legislators are focusing on understanding the intricacies of PBM pricing and pharmacy contracts to drive more transparency. Plan sponsors should work with their pharmacy partners to monitor these legislative shifts and their impact to pharmacy contracts. Working with an independent third-party pharmacy contract expert can ensure PBM oversight and help you track your utilization trends.
Overall, the pharmacy landscape will continue to experience dynamic shifts in 2024. Brokers and employers should stay proactive in their approach to managing new drugs (such as biosimilars and GLP1s), monitoring legislation impacts (such as PBM transparency and AMP Cap removal), and understanding the impacts of funding type on their plan. To discuss how pharmacy market shifts might impact your specific plan and learn more about how to optimize your 2024 pharmacy contracts, contact us today.
Truveris is a leading digital health company focused on delivering truth and clarity in pharmacy. Truveris’ proprietary technology, coupled with deep pharmacy expertise, helps to build a more efficient market that maximizes choice, accessibility, and prescription drug affordability. Our solutions provide the insight and knowledge to help people lead healthier and more productive lives.
