Drug Benefit Design Survey Touches on GLP-1s, ‘Unbundling,’ Gene Therapies, Tiering Strategies

When designing their drug benefits packages, deciding how to approach GLP-1 medications was a top concern for plan sponsors, according to Pharmaceutical Strategies Group’s 2024 “Trends in Drug Benefit Design Report,” sponsored by Prescryptive Health. The report is based on surveys of 223 individuals representing employers, health plans and union/Taft-Hartley plans.

The report highlighted the complexities presented by the demand and high costs of GLP-1 drugs. In 2024, over 90% of all employers and health plans covered GLP-1s for Type 2 diabetes, while just over 30% covered these drugs for obesity. Of those who excluded the medications for obesity from coverage, 38% considered them too expensive to cover.

The most common strategies used to control costs associated with GLP-1 drugs for obesity were prior authorization (81%) and a BMI requirement (58%). Yet even with these management strategies in place, about three-quarters of all respondents have experienced increased GLP-1 drug spend in the past six months.

Last year, Blue Shield of California made headlines when it said it moved toward an unbundled approach for drug benefits management. Yet only 38% of respondents had “heard a lot” about the approach and only one in four of them said they were moderately or very likely to pursue such an arrangement.

With an increasing number of pricey cell and gene therapies entering the U.S. market, about 73% of respondents anticipated CGT affordability would be a moderate or major challenge in the next two or three years. However, over 60% of them were not at all or only somewhat confident about their understanding of CGTs’ financial risk to their organizations.

Nearly all respondents used more than one type of trend and utilization management program, such as prior authorization, “refill too soon” limits and quantity limits. Looking ahead, about two-thirds of respondents wanted more transparency and accountability regarding costs and outcomes from PBMs. Over half said they needed more help with specialty drugs (61%) or better approaches to educate and engage their members (59%).

In terms of cost-sharing design, the most common structure across all respondent groups was using three-tiered formularies, but health plans were more likely to have five or six tiers. When asked whether they were considering a change to their cost-sharing arrangements in the next few years, respondents said the most common changes under consideration were increasing copay or coinsurance amounts (40%) and increasing the number of drug tiers (22%).

In recent years, health disparities have become a top policy priority. Yet the report showed that only one in five respondents said they have a process in place for tracking health disparities among plan members, with the highest rate among health plans and the lowest rate among smaller employers. Moreover, many respondents were unsure what actionable role their organization should play in supporting health equity.

This infographic was reprinted from AIS Health’s biweekly publication Radar on Drug Benefits.

© 2024 MMIT
Jinghong Chen

Jinghong Chen Reporter

Jinghong has been producing infographics and data stories on employer-sponsored insurance, public health insurance programs and prescription drug coverage for AIS Health’s Health Plan Weekly and Radar on Drug Benefits since 2018. She also manages AIS Health’s annual executive compensation database for top insurers and Blue Cross and Blue Shield affiliates. Before joining AIS Health, she interned at WBEZ, Al Jazeera English and The New York Times Chinese. She graduated from Missouri School of Journalism with a focus on data journalism and international reporting.

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