Save on Pharmacy Costs With Overseas Suppliers
April 28, 2022
Save money on pharmacy costs by purchasing from overseas suppliers. This saving makes a dent into your spending & moderate cost increases.
Save money on pharmacy costs by purchasing from overseas suppliers. This saving makes a dent into your spending & moderate cost increases.
Twenty years ago, pharmaceutical spending accounted for about 10% of the average self-insured medical plan’s annual expenditures. Today that number is 30%, and it continues to rise. New specialty drugs are coming out every day, and many of them have 20-year patents. But there’s a new way to tackle the increasing pharmacy costs: sourcing specialty drugs from other countries.
Here’s an example: Humira is a drug used to treat certain auto-immune diseases. It’s the top-grossing specialty drug in the country right now, and it costs around $60,000 a year if you purchase it within the United States. But if you get it from Canada, Australia or Europe, you’ll only pay around $18,000.
It’s the same drug. The same manufacturer. It just comes from the Merk factory in London or Toronto instead of Louisville or Fresno.
We began working with a domestic company about two years ago to help companies change their supply chain process for specialty drugs. For a small percentage of the projected savings, they source the drugs from other Tier 1 countries and work directly with employees to sign up for their program. They offer employees these drugs for a $0 copay, saving the employees around $100 a month. Thus saving you – the self-insured employer – 65% to 75%. It’s an optional program, but most employees do take advantage of it. Meanwhile, the identity of the employees remains confidential, and you reap the savings.
We began working with a 160-life plan in January 2022 that had roughly 50% of its entire medical spend going towards specialty drugs. With this new program, they are projecting savings of $700,000 to $800,000 annually.
This arrangement applies to self-insured plans with enough employees on specialty drugs to justify the cost. It may not be allowed by some of the larger third-party administrators. You can work with your Miller Group partner to analyze your data and determine the potential applicability and value for your plan.
There are so many expense drivers we can’t control with wellness programs and disease-specific interventions. But we CAN impact the cost of specialty drugs directly. The savings can make a huge dent in your spending and help moderate your cost increases. Let us know if we can help you look into this rewarding solution.
