Employers agree that the UHCD pipeline warrants attention and most employers are acutely aware of the upcoming wave of these treatments hitting the market. While employers noted that they will do whatever they can to help their employees get access to these life-altering treatments, they also realize that their current benefit design will most likely not be able to meet the financial challenge over the longer-term. This is especially true for self-funded employers. Moreover, the Business Group on Health’s 2021 Large Employer Survey found that the strategy for 57% of large employers was to delay inclusion of new high-cost therapies from the formulary at the launch date. This hesitancy was echoed in our conversations with employer group leaders as they stated that most employers are currently in a “holding pattern” and that “there are more “band aids” than actual strategic planning in this space”.

Another employer group leader mentioned that much of this challenge stems from the “lack of prospective data and forecast modeling”. While plans may not have the most nuanced versions of this data, employers are eager to gain more insight into their covered population. To this end, employers are hoping that their plan partners will begin playing a bigger role in flagging potential issues or raising awareness about potential UHCDs that may impact their population. In the meantime, employers have begun to change aspects of benefit design that they feel they can inflect – like steerage – but they overwhelmingly indicated that their largest cost drivers are things they feel they can’t alter, which can impact their willingness to engage and partner with health plans.

UHCDs require unique handling, administration, and cost management strategies that differentiate them from their specialty drug counterparts. However, in practice, employers aren’t necessarily distinguishing between their drug spending strategy and their UHCD strategy based on the type of therapy (durable vs chronic), but rather evaluate their drug spend based on what will most impact their bottom line. And while UHCDs pose unique financial challenges because of their large upfront cost, employers are finding it difficult to plan for a hypothetical event when the current numbers of patients on these therapies remains small. As one employer put it, the ultimate cost to the employer is “cost times volume” and in many cases more commonly used specialty drugs like Humira are driving up the expenses.

And it’s safe to say that this past year has been complicated – employers are inundated with Covid related challenges including vaccinations and return to work planning. Even though partners may be flagging incoming pipeline issues, this topic is just not front and center. Plan partners and others looking to partner with employers in this space will have to compete with several other strategic priorities that may have been tabled temporarily to address Covid concerns.

As employer benefit managers’ to-do lists continue to grow, the responsibility of managing health care related tasks grows as well. Employers noted that this type of responsibility requires a skillset and knowledge that historically was not housed in the HR component of their business. Some employers have started to bring this knowledge in house by hiring clinically trained executives, but many are also turning to partners in the health care space like health plans, consultants, and vendors to assist. For example, with growing experimentation in payment models like outcomes-based agreements for pharmaceutical products, employers acknowledge that they likely don’t have the clinical expertise to effectively make those contractual decisions.

At the same time however, employers feel caught up in the ongoing battle for control in the pharmacy management marketplace. Many of the employers we spoke with noted that they sometimes had a difficult time understanding how the additional products and services that their plan and PBM partners offer them add value for their employees. Employers want to see that their partners are truly that---partners when it comes to addressing these new and complex problems. One employer mentioned that instead of addressing current drug spend, their health plan partner would come to the table with an overwhelming number of digital platforms from care management to diabetes management. This type of interaction made them feel that their health plan was less of a “consultative partner and more of a product creator”. Health plans that want to maintain and improve their role with their employer market need to be looking for ways to share both prospective and retrospective data with their employer partners, and to work on shared goals. This will help put the employer in the driver’s seat by helping them lead the conversation as a partner rather than solely a consumer of health plan services.

UHCD claimants continue to be a major area of concern for employers, and they remained unconvinced that the solutions offered by their partners are sufficient to meet this challenge for them. Many of the employer groups we spoke to cited high cost drug spend as a top-of-mind issue for them, though how able employers are to absorb the added cost from UHCDs is largely a function of their size. One employer mentioned that not only is the price of UHCDs a concern, but so is their ability to spread those costs out over several years.

When it comes to performance-based agreements, several of the employers we spoke to felt that manufacturers rarely take on sufficient downside risk, which made these kinds of arrangements less appealing to self-funded employers. Alternatively, some employers expressed an interest in contracting directly with specialty pharmacy vendors, as well as switching to “transparent PBMs” that commit to passing through all discounts and rebates to the health plan partner. Regardless, employers are overwhelmingly looking for support from their partner organizations, like health plans, to leverage their size and influence to secure better deals with manufacturers. However, employers aren’t waiting around here—in the absence of an innovative partner, employers are building coalitions and utilizing their collective influence to push manufacturers for better arrangements.