Demand for new weight loss medications continues to rise and employers remain concerned about budget impacts if they decide to offer these costly medications as part of their benefit package. These medications, known as GLP-1 agonists have skyrocketed in popularity and are thought to be “miracle drugs” by many. The reality is that weight loss requires a multi-modal approach and not all people who use them will achieve significant weight loss. Studies have shown that once discontinued, patients gain an average two-thirds of the weight back1. The reality is there is no miracle cure, but these medications have helped to destigmatize obesity and make clear the benefits of taking a multi-faceted approach to sustain weight loss.

Employer Case Study

As is the case with many organizations, weight loss drug strategy was recently of particular interest to one of our clients, edHEALTH. The client was interested in the positive impacts yielded but was daunted by the complex dynamic of long-term cost versus benefit.   

Spring assisted edHEALTH in assessing a best practice avenue for weight loss drugs, keeping in mind that spending on obesity-related conditions result in approximately a 12% increase in total healthcare costs2.  Wegovy (semaglutide) has an average price of approximately $1,349 a month, or more than $15,000 annually. That is more than double what the Institute for Clinical and Economic Review (ICER)3, a private entity that provides an independent source of evidence review and creates cost-analysis reports, recommends, instead stating that Wegovy should be priced somewhere around $7,500–$9,800 per year to fall into the cost-effective threshold.

We worked with edHEALTH and its PBM partners to fully understand their weight loss medication utilization management and monitoring parameters. As a member consortium, edHEALTH is committed to providing their member institutions with the information needed to assist them in determining the best cost-management strategies. Therefore, a key part of our evaluation was to prioritize the education of staff and faculty on the protocols and side effects of these medications to potentially narrow the interest to those highly motivated groups. There is no one size fits all solution, but there are specific points of consideration and educational resources that can help organizations of any kind address this topic with stakeholders.

Additional recommendations included:

For example, edHEALTH hosts an annual walking challenge between member schools, with prizes and check-ins along the way. The healthy competition creates a simple yet effective way to get employees moving more than they might otherwise, and a tactic like this pairs nicely with an overarching weight loss strategy.

Considerations for Employers

Ultimately the choice to cover these medications is an organizational decision, but it’s critical to have all the information necessary to make this decision, starting with a robust view of your population demographics. With high rates of obesity for most health plan sponsors, a prudent and thoughtful approach to expanding weight-loss coverage will be required. Attempts like this to tackle the obesity epidemic could produce long-term savings with lower overall healthcare costs, prevention of progression of existing diseases, and most importantly a better quality of life and employee experience. 

No matter your decision on offerings, the more you can offer through communications and education will help your plan participants make informed decisions and understand their role in achieving and keeping weight off. To realize tangible results, all parties must be committed.

Our clinical pharmacist and benefits consulting team is here to help you assess weight loss as a component of your benefits strategy, including not only weight loss drugs but also wellbeing initiatives and data analytics for monitoring success. Get in touch for assistance in navigating this nuanced and rapidly evolving area.


As pharmacy and prescription drugs continue to drive healthcare costs for employers. Many are reevaluating their Pharmacy Benefit Manager (PBM) arrangement to ensure transparency, strategic alignment, and fair pricing. Click here to access our Q&A and generate your PBM Report Card.

A summary of our webinar with the Northeast HR Association (NEHRA)

When it comes to health and productivity programs, the past several years have been a time for Benefits and HR professionals to test out a range of initiatives in response to pandemic and post-pandemic challenges, priorities, and employee expectations. Now, however, the market is in a different place and it is time to assess the impact of recent program offerings; does the reward outweigh the risk?

The Big Picture

Today’s economy is creating urgency around making sure benefits programs are properly managed. High inflation rates touch everything; the impact doesn’t stop at the grocery store or the gas pump, it extends to already high healthcare costs. In addition to the economic reality, we have seen an increase in healthcare utilization coming from new treatments and technologies available, further increasing costs. Relatively low unemployment may have shifted attraction and retention goals for some organizations, but a rise in layoffs is having tangible effects on the labor market at large which trickles down to employer strategies. It’s not just employers facing challenges, though, as healthcare services have become unaffordable for many and consumers/employees are also feeling the cost burden.

As a starting point, take a look at your data to answer questions like:

You should then be able to assess whether or not your benefits align with your population as well as your corporate objectives. When determining true return on investment (ROI), it’s important to consider both human and financial perspectives.

Now that we have established a bird’s eye view of the risk versus reward equation, let’s drill down into key plan components that factor in.

1. Risk Management

There are a range of risks to consider within your benefits strategy. There is the risk of buying insurance, and the allocation of funds. There is the risk to your employees of undertaking a high cost treatment, if necessary, which may not be feasible for lower wage workers.

When it comes to benefits funding, the following graphic illustrates the spectrum of options available, where the risk taken by the employer increases as you move toward the right.

While a fully insured plan largely frees the organization of risk, there is typically a lot of overhead and administrative costs involved and less governance when it comes to claims management. Overall, though, we encourage our clients to consider this spectrum and determine where they fit in related to risk appetite, budget and resources, specific health trend, and more.

2. Financial Management

Related but separate from risk management comes the financial management of your benefits program(s). There are three key activities that fall within this bucket:

The insights gleaned from the financial management arm should be embedded into your overall benefits and risk management strategy, rather than live in a silo.

3. Pharmacy

Pharmacy has been top of mind for employers, understandably so given the rapid rise in prescription drug costs, which now constitute anywhere from 20-25% of total healthcare spend in the U.S. Specialty medications account for 50% or more of pharmacy spend even though only about 2% of the population is using them. Brand and generic drug costs are also rising at rates we have not seen in the past, perhaps in correlation with inflation. Suffice it to say, employers are struggling to mitigate their own costs as well as the costs for their employees. So, what can be done?

Within the pharmacy benefits landscape, two areas have been getting a lot of attention: weight loss drugs and biosimilars.

Weight Loss Drugs

Chances are you’ve heard about a new wave of “Hollywood diet” drugs. There has been an enormous amount of marketing going on around these new weight loss drugs, especially in the realm of social media and influencers. All of the buzz has also gotten the attention of employers, who are asking us questions surrounding coverage, costs, and pros and cons.

To provide some background, of the four weight loss drugs taking center stage, only two have indications for weight loss, while the other two are being used off-label. Weight loss drugs are not new, but these varieties are showing results we haven’t seen before, and their arrival on the market is timely, as about 42% of the population is either overweight or obese.

From a health and productivity standpoint, we know that obesity increases a person’s risk of developing a chronic condition, which leads to higher healthcare costs. But we also know that there are financial and non-financial reasons to foster a happy and healthy workforce. Can and should weight loss drugs be an answer for employers?

These new drugs are retailing for about $1,300 a month, so we need to consider annual costs and the longevity of how long an employee will need to stay on the medication. For employers considering them to their plan, we recommend it being one piece of a comprehensive strategy that also includes wellness initiatives and/or a commitment from those prescribed the drug. In addition, you must build strong monitoring protocols to judge effectiveness and impact on overall plan costs and utilization.

The inclusion of weight loss drug coverage in a health plan will make sense for some employer groups, and not others. We recently talked with an employer client who saw enough value in even a 10% reduction in body weight to convince them to cover the drug. However, any decisions need to be based, once again, off of population data and corporate objectives. This is a new and evolving sector, so your strategy should remain fluid as we see developments.


Biosimilars are non-generic alternatives to those specialized medications that are very targeted in how they work and on what conditions they combat. There has been a lot of anticipation surrounding biosimilars as a solution to the specialty drug cost crisis. At the beginning of the year, a biosimilar of Humira, the number one drug dispensed in the U.S. which is used to treat inflammatory conditions, entered the market as the first biosimilar. While there has been some impact, to date it has not been the silver bullet we were hoping for. We can see below that biosimilar adoption rates are all over the map depending upon the condition for which it’s being utilized.

For employers, what’s important is vigilance in understanding where your Pharmacy Benefit manager (PBM) has positioned biosimilars as far as coverage is concerned. We have found that PBMs are placing biosimilars typically at the same parity with the reference, or brand name product. In this case both Humira and its biosimilar would be considered tier 3 medications, which does not yield the anticipated savings. Why is this? Well, there may be additional rebates available to employers and health plans if they continue to use the reference product.

This is a complicated space that continues to change at a rapid pace. Overall, though, if biosimilars are working the way we want them to, we need to figure out a way for all stakeholders to embrace them as a lower cost alternative instead of being locked into brand name drug prices. In some cases, the drugs are life-changing, so we do want to cover them but in a more sustainable way. We work with clients to ensure they are informed of and ready for these advancements and nuances.

4. Targeted Point Solutions

The term “point solutions” now represents a large umbrella of tools, however it typically references programs that target specific diagnoses such as diabetes, oncology, and hypertension. In recent years there has been significantly more interest in point solutions from our employer clients, and, especially with multiple solutions running at a time, these can be a slow leak on spend. Now is a good time to take a step back to answer that risk versus reward question for point solutions.

The best place to start in assessing point solutions whose reward outweighs the risk is data analytics. Try to use any data you are getting from your health plan, internal teams, or the industry to benchmark your spend. In areas where your spend is high relative to benchmarks, do a deep dive for potential solutions that can help. Some pitfalls in this area include:

5. Absence Management

Absence management is highly correlated with your health plan performance, since the vast majority of your high cost claims will also include a leave of absence, so there are both plan costs and productivity rates at play here.

Making absence programs more challenging is the volume of stakeholders involved and laws with which you need to comply (as seen below).

Further, when we talk about absence management, we account for a wide range of benefits including short- and long-term disability, statutory disability, workers’ compensation, FMLA, ADA state paid family and medical leave (PFML), and others.

With absence, different than with medical plans, your company’s managers and supervisors are directly involved when it comes to plan design, governance, staff training, etc., so it is an area where you typically need to look inward to drive change.

When it comes to the risk/reward balance of an absence management program, employers can make sure corporate programs are set up the way they want, for example, promoting the right attraction and retention strategy. Remember that the more generous your programs are, the more they will cost and the higher the risk you take on. If shifting some responsibility to an outsourced partner, be sure you still have monitoring protocols in place.

Closing Thoughts

Across these five areas and more, we encourage you to get familiar with your organization’s plan and demographic data. Depending on your size, the level and depth of data available might be different, but there is always some data available, such as industry standards and benchmarks. Whether you are focused on weight loss drug strategy, funding, or point solutions, you can take those data-driven insights and apply them across these four pillars to determine your best practice.

If you are having trouble getting started, or could use specific guidance surrounding the topics mentioned, please get in touch with our team.

As we wrap up Mental Health Awareness Month, it was only fitting that the New England Employee Benefits Council (NEEBC) hosted their Annual Summit just a couple of weeks ago. Mental health awareness and wellbeing resources are top of mind for employers and HR teams across the nation, and, as we saw at NEEBC, specifically a focus in New England. Some additional hot button topics during the conference included:

1) Inflation/cost control strategies

Maneuvering around inflation and costly claims are top priorities for benefits professionals nationwide and was a constant topic of discussion by both presenters and attendees. The first keynote panel focused on the “Current Economic, Political and Cultural Landscape:  Where We Are. Where We’re Going. Why It Matters.” They explored typical cost drivers, workplace trends (hybrid, remote, and on-site), and how HR teams can help preserve New England’s unique culture within their workforce.

2) Understanding the needs of your workforce

As many employers have shifted to remote and hybrid models, communication and understanding the needs of the workforce has been challenging for many. One session that really resonated with me included two benefits specialists from ZOLL Medical; they reviewed how benchmarking and survey data helped give their workforce a voice when it comes to their benefits. On the other side, they also looked at pitfalls and obstacles they faced initially and how they overcame them, and steps they took to optimize their survey process.

3) Promoting wellbeing and mental health

Finally, mental health and employee wellbeing continue to be top-of-mind at HR and benefits conferences across the nation. As mental health resources have become a mainstream benefit area, employers are now looking at alternative and new programs to stand out and retain/attract talent. A professor from Northeastern University’s Department of Health Sciences presented on social determinants and their impact on employee health and wellbeing. He leveraged his research to outline best practices and how HR teams can alter their offerings to fit the needs of a diverse workforce.

As a pharmacy consultant, I was excited to see the interest people had in Rx cost control tactics, PBM logistics, and specialty drug strategies. The costly and challenging landscape of pharmacy benefits should motivate employers to implement program changes; we can help. Here are some considerations and tools employers can utilize to address employee wellness, which, in turn has a direct impact on pharmacy costs. Thank you to NEEBC for another insightful event and we look forward to the next one.

As Seen on AleraGroup.Com

An aging population, medical advances that extend life expectancy and soaring costs for long-term care are the principal drivers of a problem too many Americans don’t consider until it’s too late: paying for care that standard health insurance doesn’t cover.


Yet a survey released in July of 2022 found that only one quarter of adults between the ages of 40 and 64 with annual household income between $75,000 and $150,000 have or are even considering funding reserved for long-term care. Forbes reported on the survey in a piece titled “Most Americans Are Unprepared For Long-Term Care Costs, New Research Shows.”

That’s a headline as apt as it is ominous.

“Everyone should be having conversations with loved ones about wishes and needs,” Tom Beauregard, the CEO of the home healthcare service that co-sponsored the survey, told Forbes. “And from these conversations they should then be either earmarking a significant portion personal savings for long-term care needs or they should be enrolling in lower-cost policies to cover at a minimum one year of long-term care needs.”

LTC Learning Opportunity

Funding long-term care is the subject of the next event in Alera Group’s Engage series of employee benefits-focused webinars: What’s Coming Next With Long-Term Care Coverage? During the June 15 webinar, we’ll discuss:

Joining me on our panel of Alera Group experts on long-term care coverage will be Regional Compliance Consultant Bob Bentley; Shane Johnson, Senior Partner at Perspective Financial Group; and Tina Santelli, our Vice President of Voluntary Benefits and Enrollment Solutions.

Employers who offer or are considering LTCi as a benefit will want to learn the latest about this evolving coverage. Individuals, especially those approaching or past age 50, should be interested as well. As those studies about long-term care show, most of us are going to need it.

Awareness and Affordability

Why do so few Americans have or plan to purchase some form of long-term care coverage? Many don’t realize how expensive long-term care can be. Others aren’t aware of the restrictions on Health Insurance, Medicare and Medicaid. Some aren’t aware that Long-Term Care Insurance even exists.

But for even the best-informed, the matter simply comes down to price, and Long-Term Care Insurance is one of the more expensive personal lines of coverage. According to data from the American Association for Long-Term Care Insurance, average annual rates in 2020 were $1,700 for a 55-year-old man and $2,675 for a woman of the same age (with differing actuarial tables accounting for the variation in premium).

That said, here’s something else to consider: Typically, Long-Term Care Insurance activates when an insured is no longer capable of independently performing two activities of daily living (ADLs). Most Long-Term Care Insurance carriers recognize six ADLs:

When you think about the type of facility or in-home service you’d prefer to provide you with such assistance once necessary, or when you realize the burden on family members called on to assist in those daily activities, the cost of LTCi may seem more reasonable.

It is a lot for an individual or couple to consider, and it requires an informed decision. For employers, offering coverage of long-term care – as either a paid or voluntary benefit — shouldn’t be nearly as difficult. Most employees surely would appreciate it.

We’ll discuss it further on June 15. I hope you’ll join us.



With Ozempic in particular capturing headlines, a new generation of weight loss prescription medications have gained recent traction. According to the National Institute of Diabetes and Digestive and Kidney Diseases, more than 42% of American adults are obese or severely obese, a rate that has almost doubled since 19801. Although we remain a society hyper-focused on pant size, the potential health benefits of these medications should not be ignored.  

The World Health Organization (WHO) reports that four million people die each year from underlying conditions related to obesity. Obesity has been known to increase your risk of developing type 2 diabetes, hypertension, cardiovascular disease, kidney disease, stroke, sleep apnea, osteoarthritis, and certain types of cancer, and can extend beyond the physical realm to negatively impact mental health as well2.

As employers and the nation work to combat soaring healthcare costs, obesity could be a critical piece of the puzzle since medical costs for the obese tend to be 30%-40% higher than those with a healthy weight3. A study by Xcenda estimates that if obesity rates in the U.S. were 25% lower, we would see a 115% decrease in IUC admissions and deaths related to COVID-194.

We all know that losing weight is not as simple as it sounds. In addition to your average obstacles, social determinants of health such as income, education, location, and food insecurity, as well as genetics and hormones play big roles in the obesity equation and should not be minimized. Although a magic pill rarely exists, it is possible these new drugs could be perceived by some as magical.

To sprinkle some of that magic without too much smoke and mirrors, employers can ensure their health plan and Pharmacy Benefit Manager (PBM) partners have the right policies and eligibility criteria in place to ensure these medications are available for the right people.

The Basics

Two drugs, Wegovy (semaglutide) and Saxenda (liraglutide) both manufactured by Novo Nordisk have FDA indications for weight loss. Trials for Wegovy and Saxenda produced 15% and 5-10% average weight loss results, respectively5. Although positive, the sample is small, and the long-term impact is unknown. Novo Nordisk’s marketing campaign created a frenzy, resulting in a national shortage of the drug. In 2022, Wegovy prescriptions increased by 284%6. The demand is so high, in fact, that Novo Nordisk is now prioritizing the limited supply to existing patients, making it harder for new patients to start the medication. Saxenda (liraglutide), which hit the market in 2015 experienced success, but preference has since shifted to Wegovy due to its once weekly injection and more robust weight loss potential.

Ozempic (semaglutide), also produced by Novo Nordisk, and Mounjaro, through Eli Lilly, are both currently approved for diabetes but are seemingly being used off-label for weight loss. Industry leaders believe Mounjaro, which is said to give off an even stronger fullness signal and reports even more weight loss than Wegovy.  The initial results are positive with favorable weight loss in 80% of patients taking Mounjaro and average weight loss at 15%, based on information from The New England Journal of Medicine. It is expected the drug will be approved for weight loss later this year.

Side effects for these drugs do exist, although relatively mild, include nausea, vomiting, diarrhea and acid reflux. The good news is that that with time these side effects typically subside. Patients may also experience pain at the injection side, dizziness, or fatigue. There is a general warning with the GLP-1 receptor agonists drugs regarding the risk of thyroid tumors7 in specific populations. Individuals should work with their physician to evaluate their appropriateness for the drug.

Contrave is another weight loss drug produced by Orexigen Therapeutics that was approved for weight loss in the U.S. in 2014. Contrave is approved for people with obesity (a body mass index of 30 or more, or of 27 or higher with at least one weight-related condition). Contrave, an oral tablet, is a combination of two active ingredients, naltrexone and bupropion, which together work to suppress appetite and increase the feeling of being full after eating. Clinical trials report that Contrave can lead to a loss of 4%-8% of body weight. Similar Rx benefit policies and restrictions are in place but provide an alternative to patients.

Many medical experts recommend long term therapy for patients but with evidence still emerging recommendations are changing quickly. It has been reported that most people gain the weight back after stopping8 which would likely result in an endless cycle.  While these drugs do yield hope, they still are not a silver bullet, and ideally would be one piece of a comprehensive health betterment plan that also focuses on healthier eating and exercise habits9.

The Numbers

These medications have high price tags with Wegovy retailing at approximately $1,300 a month and lack of coverage without strict prior approval criteria. Even with the high price tag, some patients are willing to cover the cost out of pocket and can find manufacturer programs to offset some of their costs. This industry has a projected market value of approximately $100 billion in less than ten years. Reuters reported on March 29, 2023, that WHO is considering adding obesity drugs to their ‘essential’ medicines list, but this remains to be seen.

If we know that obesity rates are linked with environmental, generic, and social determinants of health, only a tiny piece of the epidemic can be mitigated with these drugs which does not serve as an equitable solution. In that vein, we are keeping our eyes on the proposed bill entitled the Treat and Reduce Obesity Act, which could alter insurance requirements for obesity treatments like these, but carriers may hold out until long-term effectiveness can be proven.

It is worth nothing again that only Wegovy, Saxenda, and Contrave are currently authorized for weight loss alone, but there is evidence that other versions of the drug (i.e. Ozempic and possibly Mounjara) are being used off-label for weight loss by non-diabetics.

Employer Considerations

As I mentioned, many insurance carriers only cover medications in this category in the case of diabetes. However, a survey conducted by the International Foundation of Employee Benefit Plans (IFEBP) states that 22% of employers in the U.S. cover prescription drugs for weight loss, and 32% offer weight management programs. This is driven by the fact that 25% of employers report obesity as the largest detriment to healthcare costs.

Given this, it’s likely important for employers – at least self-insured employers – to consider a formal but flexible policy related to weight loss medication as research evolves.  A thoughtful program must consider all options available and pinpoint if these medications will positively impact your population and plan costs.  A comprehensive policy will likely require prior authorizations, potential lifetime maximums and perhaps coverage in collaboration with other treatments (i.e. nutritionist, diet programs, workout routines, etc.).  In addition, coordination with your pharmacy benefit manager will be critical to ensure you can take advantage of competitive pricing and rebates where appropriate.


Excess weight can take a hefty toll on a person’s body and mind. It can lead to serious health conditions which can lead to premature death, substantial disability, and/or negatively impact memory and mood. The fact is that obesity diminishes almost every aspect of health and the charge to “lose weight” or “maintaining a healthy weight” is frankly daunting. It is also very frustrating that the high costs of these medications are often cost prohibitive for many and inappropriate prescribing does not help our efforts to “reign in” pharmacy costs.

As employers we must look at the entire picture; both short- and long-term goals and educate ourselves on what coverage really looks like with our medical and PBM partners. We have a responsibility to ensure they have criteria in place to closely monitor authorization and utilization of these medications so to ensure the right person has the right drug at the right time and continues to benefit from it over time. Spring is happy to be the conduit for your organization in analyzing population health data, evaluating coverage options, ensuring the appropriate protocols are in place, and working with your PBM to build a strategy for prescription weight loss drugs into your larger benefits program.

1 Obesity Statistics. The European Association for the Study of Obesity. 
3 Public Health Considerations Regarding Obesity. StatPearls


According to Pharmacy Times, between July 2021 and July 2022, more than 1,200 medications had a price increase that surpassed the inflation rate during that time of 8.5%, with the average increase across these drugs coming to a staggering 31.6%. Overall prescription drug spending is projected to rise at an average annual rate of 6.1% through 2027.

Why are we seeing this uptick? An aging population, healthcare services costs, and administrative costs (e.g., financial transactions and patient services) are likely partly to blame. There are a range of strategies and tactics to help combat rising pharmacy costs within your benefits program, but it is important to understand what is driving these costs both globally and specifically within your organization. There is much talk about the skyrocketing costs of specialty medications. Specialty medications are now responsible for over 50% of total pharmacy costs, yet only about 2% of the population is using them.1 Unfortunately, a significant portion of pharmacy spend is going towards innovative and/or targeted therapies that treat rare, complex, genetic or inherited diseases, and cancer – all of which are usually beyond our control.

Preventing the Preventable

On the other hand, however, there are several behaviors that have a strong influence on health outcomes: tobacco use, alcohol consumption, physical activity, and diet.6 A direct correlation between cigarette smoking and the risk of heart disease has been shown and it is in fact the single most important modifiable risk factor for heart disease. Cigarette smoking has also been linked to certain cancers, which is the second leading cause of death in the United States. In fact, 16 million Americans have at least one disease caused by smoking, costing over $240 billion in healthcare costs annually.1 

Obesity has been linked to multiple chronic diseases including heart disease, diabetes, and musculoskeletal conditions impacting bone health. The Centers for Disease Control and Prevention (CDC) reports that obesity adds another $173 billion worth of burden on the healthcare system per year because of resulting complications. Several studies have documented the adverse cardiovascular health effects that plague overweight adults. This is partly because obesity adds increased demands on the heart to supply blood to the body.  Excess body weight and obesity are linked with an increased risk of high blood pressure, diabetes, heart disease and stroke. Losing as little as 5 to 10 pounds can make a significant difference in your risks. Even if weight control has been a lifelong challenge, taking small steps today can go a long way.2

Diet and physical activity are behaviors that directly influence weight. However, they may also have direct effects on diseases.

Wellness interventions provide an opportunity for us to have some control over the healthiness of our workforce. These interventions play an important role in moving the needle by working to solve for the root causes at play. Employers should be incentivized to implement these preventative programs not only because wellness programs are considered as “nice perks” that increase employee morale and productivity, but also and more importantly, they are tangible solutions that can reduce the burden of health and pharmacy costs. If less employees need prescription drugs in the first place, pharmacy spending could decrease dramatically. Seems easy, right?  

Let’s Get Tangible: Wellness for Outcomes

The higher the risk factor prevalence within a population, the greater healthcare costs are likely to be, both within the pharmacy realm and overall. Therefore, wellness initiatives targeted towards combatting, reducing, or preventing these risk factors will have a more tangible impact on reducing costs and improving health outcomes.

A Targeted Approach

There are six key lifestyle behaviors that promote a long and heathy life3:

The goal is to reduce the need for prescription medication by stopping problems before they even exist. In a study of 55,000 people, those who made healthy lifestyle choices such as avoiding smoking, eating healthy, and exercising lowered their heart disease risk by about 50%.4 In fact, unhealthy lifestyle behaviors such as those that oppose those listed above cause approximately 70-90% of chronic diseases, which yield up to 75% of total healthcare spend in the U.S.5 As such, when it comes to medical and pharmacy costs, the most successful wellness programs  will be those aimed at those six pillars and affecting long-lasting behavioral changes.

Wellness Point Solutions

The good news is, the wellness industry awakened with this realization a decade or so ago, in the midst of out-of-control healthcare costs, and now there are a plethora of wellness companies and tools available for employers to leverage. In fact, in the U.S., the wellness industry represents $1.2 trillion in revenue6. Homing in on the six behaviors above, employers might consider the following*:

A range of wellness point solutions are out there, and the all-encompassing ones will have tools pointed toward all six of our wellness pillars. Additionally, larger employers have started to introduce onsite health clinics and resources to make employee engagement in their health more convenient. Some incentivize through walking or step challenges. Health plans build in wellness incentives such as reimbursements for gym memberships. Whatever it looks like, introducing preventative measures that lessen the prevalence of disease and poor health outcomes; reduce the need for prescription drugs, lost work days, and absence from work; and improve mental health; can lessen overall healthcare costs and prove advantageous for your workforce.

Before you make any decisions around wellness solutions, be sure to understand what is driving your pharmacy spend within your own organization. We recommend working with a consultant or actuary to take an unbiased and robust view of your data. Better yet, consider taking the next step to…

Work With a Clinical Pharmacist

Even the best wellness programs cannot prevent or reverse existing and/or genetic health problems within a workforce population, and there are times when prescription medications are necessary. Typically, a clinical pharmacist is not part of your health benefits team, weighing in on strategy and dissecting the needs of your workforce population. I firmly believe this is both a gap and an opportunity.

An experienced clinical pharmacist can look at the full array of options available through a different lens, putting all the pieces together (medical, Rx, wellness, etc.) and provide targeted recommendations to improve outcomes while controlling costs.

Another important role of a clinical pharmacist is the ability to recognize signs of medication non-adherence, which can cause disease progression and adverse outcomes. If your organization is spending money on prescription drugs that are not being taken correctly and therefore cannot have the intended effect(s), a pharmacist can flag that up.

Get in Touch

When it comes to healthcare and pharmacy costs, many of the factors involved are out of our hands. However, we do have some power to affect change and take control through preventative, wellness, and innovative and targeted pharmacy solutions. Given the current climate, why wouldn’t we aim to do so?

If you need assistance assessing your current wellness programs, navigating the marketplace of vendor solutions, conducting a Request for Proposal (RFP), auditing your pharmacy benefits contract terms and utilization data, or are interested in leveraging a clinical pharmacist to yield customized and impactful results, our team would love to chat with you.

*Please note, Spring’s intent is neither to promote nor recommend any of these specific solutions, but rather to portray a snapshot of what is available in the market.


On National Pharmacist Day, our Assistant Vice President of Pharmacy, Jennifer Perlitch, a clinical pharmacist, is offering her view and surprising facts about the pharmacy industry today, as well as how she’s helping Spring’s clients combat the difficult climate.

The fact that pharmacy costs continue to skyrocket is not groundbreaking news. But what many people aren’t aware of is the “why” behind the increases. Several factors influence the price of a prescription drug such as the drug’s uniqueness and effectiveness and how much, if any, competition exists in the market. Unfortunately, there are times when drug prices increase significantly without important new clinical evidence. Regardless of why, as these prices continue to increase, it creates a significant burden on patients who need to pay deductibles or coinsurance.

So, what’s going on behind the scenes? Pharmacy is just one piece of the healthcare puzzle, and we know overall healthcare costs are also on the rise. There are five key reasons why healthcare costs are rising1:

When it comes to pharmacy specifically, there are two of these areas that I want to dive further into.

Chronic Disease Prevalence

Six out of every 10 adults in the United States have a chronic disease or condition, according to the Centers for Disease Control and Prevention (CDC). The most common chronic conditions in the U.S. include:

Chronic conditions often require long-term medical attention and prescription drugs which often delay disease progression and improve or preserve quality of life. Some conditions may limit daily living activities, which could warrant use of home health care or other support services. The challenges of living with chronic illness also may increase the likelihood of suffering from anxiety, depression, and other mood disorders.

All these factors make caring for chronic disease patients more complex and resource intensive. There is a strong relationship between healthcare costs and chronic diseases in the United States. According to a report from the American Action Forum, the U.S. spends about $3.7 trillion each year for the treatment of chronic health conditions and the resulting loss of economic productivity.

In addition, the COVID-19 pandemic has caused some chronic disease patients to delay or avoid essential care. This means that chronic disease patients are spending less on healthcare services in the short term, but this will likely have damaging health and financial effects in the long term. When chronic disease patients delay care, they risk suffering from potentially life-threatening complications as a result. The long-term management of these complications will likely contribute to rising national health expenditures and consumer costs.

Rising Drug Prices

According to the Organization for Economic Cooperation and Development (OECD), the average American spent about $1,226 on prescription drugs in 2019 (the most recent year with internationally comparable data). This per capita cost is significantly higher than other developed countries. These costs will likely continue to increase, as the Centers for Medicare & Medicaid Services (CMS) estimates that prescription drug spending in the U.S. will grow by 6.1 percent each year through 2027.

The spending growth is due in part to a continuing emphasis on specialty medications and precision medicine. Specialty drugs are high-cost prescription medications used to treat complex conditions such as autoimmune diseases, chronic conditions, and cancers. Some therapies utilize genetic data to deliver a highly targeted, personalized treatment. The complex nature of these drugs makes them very costly to develop and distribute.

Drug pricing strategies also contribute to rising healthcare costs. Drug manufacturers establish a list price based on their product’s estimated value, and manufacturers can raise this list price as they see fit. In the U.S., there are few regulations to prevent manufacturers from inflating drug prices. There is no federal oversight; the federal government does not regulate drug pricing. It does however encourage the development of generic drugs through an abbreviated approval process to help improve access and affordability, but this often takes years.

Private Health Insurance and Out-of-Pocket Costs

Private health insurance spending growth accelerated slightly to 4.5 percent in 2018, from 4.2 percent in 2017. This trend is the net effect of faster spending growth in many services such as physician and clinical services and prescription drugs, which were only partly offset by slower projected growth in the net cost of private health insurance spending. In 2019, private health insurance spending growth slowed to 3.3 percent, which, in part, reflects the estimated impact of the effective repeal of the individual mandate within the Affordable Care Act (ACA). Over the latter period of the projection, 2020-27, private health insurance spending is projected to grow by 5.1 percent per year on average (or 1.8 percentage points more rapidly on average than in 2019) resulting mainly from the lagged response to higher projected income growth, especially in 2020-22.

Out-of-pocket (OOP) spending growth is projected to have grown faster at 3.6 percent in 2018, from 2.6 percent in 2017, due to faster income growth, as well as higher average deductibles for private health insurance enrollees with employer sponsored insurance. During 2020-27, out of pocket spending growth is projected to accelerate to an average annual rate of 5.0 percent, which is a similar rate as private health insurance during this period. During this timeframe, somewhat faster growth was projected for 2022, a year in which OOP spending was anticipated to grow 5.4 percent related to the excise tax on high-cost insurance plans3.

How can the Spring Consulting Team help?

As an employer you want the best for your employees and their families. Ensuring your pharmacy benefits meet their needs and supports their well-being is a critical component of your benefits package.

Evaluating your current pharmacy benefit offerings is an excellent place to start!

Here is an overview of our Pharmacy Benefits Consulting Services:

Evaluate current Pharmacy Benefit Management (PBM) Services

– Conduct annual/semi-annual reviews of PBM services, contract compliance, and performance guarantees and provide recommendations/assist in developing a plan to rectify any deficiencies.
– Perform follow-up activities as necessary to ensure contract compliance, efficient program management and responsive account management
– Review and evaluate utilization and any other key reports to assess trends/areas for opportunity

New PBM Implementation Services

– Facilitate implementation of the new PBM services including transition of benefit design, formulary, eligibility and pre-existing prior authorization approvals to new PBM

Pharmacy Benefit Consulting Services

– Review pharmacy benefit packages options and assist in selecting best option for your business needs
– Evaluate and recommend options for managing specialty pharmacy products
– Analyze the performance of the retail, mail order, and specialty pharmacy benefit option and make recommendations to improve the management of the drug cost trends
– Review and evaluate clinical and other optional programs and provide recommendations
– Meet with key stakeholders semi-annually (or quarterly) to review drug plan performance and identify recommended changes going forward.

Account Management Services

– Manage the ongoing relationship and communications with the PBM regarding specific eligibility and benefit updates
– Represent and advocate for business needs with the PBM when needed
– Participate in all PBM and client meetings related to pharmacy benefit and mail order services

Given the perfect storm outlined above, now is a great time to reassess all your benefits programs, but especially those related to pharmacy; please get in touch if you would like to optimize in this area.