Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It’s impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 5% or more price differential (paid versus actual cost) we consider this a problem.

As if employers didn’t have enough headaches in managing their employees’ health benefits, now they face an emerging trend that carries an enormous price tag: the growing number of specialty drugs to treat complex medical conditions.

While the new generation of genetic-based specialty drugs, known as biologics, bring major breakthroughs in treating people, their costs are daunting.

Just one in 100 members of Blue Cross Blue Shield of Michigan use a specialty drug, but the class of pharmaceuticals now accounts for 30 percent of what the insurer pays out in pharmacy claims for all drugs, said Hiral Patel, a clinical pharmacist at BCBS.

“It seems like every single drug that is coming out to treat a rare condition has a hefty price tag,” Patel said during the recent health benefits seminar held by Advantage Benefits Group in Grand Rapids.

Specialty drugs taken orally, by infusion or injected to treat complex conditions such as cancer, multiple sclerosis, rheumatoid arthritis, hepatitis, inflammation, Crohn’s disease or infertility collectively carry an average cost of $2,475 per month per medication. That compares to an average cost of $280 for a brand-name drug and $32 a month for a generic drug, according to Blue Cross Blue Shield of Michigan data.

Patel cited one drug for cystic fibrosis that costs $365,000 a year.

Step #1:  Obtain a price list for generic prescription drugs from your broker, TPA, ASO or PBM every month.

Step #2:  In addition, request an electronic copy of all your prescription transactions (claims) for the billing cycle which coincides with the date of your price list.

Step #3:  Compare approximately 10 to 20 prescription claims against the price list to confirm contract agreement.  It’s impractical to verify all claims, but 10 is a sample size large enough to extract some good assumptions.

Step #4:  Now take it one step further. Check what your organization has paid, for prescription drugs, against our pharmacy cost then determine if a problem exists. When there is a 5% or more price differential (paid versus actual cost) we consider this a problem.

A recent report by consulting firm Visante found that PBMs will save Medicare, companies and consumers nearly $2 trillion on prescription drugs between 2012 and 2021. Visante was hired by the Pharmaceutical Care Management Association to complete the study.

However, consumer advocates are questioning how much value PBMs are actually adding to the process. PBMs “essentially are middlemen who also add costs to the system,” Wendell Potter, a consumer advocate and former spokesman for Cigna insurance, told USA Today.

A Department of Health and Human Services rule that went into effect last year requires PBMs to report to the government the rebates and discounts they get from drugmakers when they are processing Medicare benefits, but that information does not have to be shared with the public.