Mental health drug use rose in 2021, but not all pharmacy costs, new report shows

As mental health burdens have increased during and even before the pandemic, the use of mental health medications has also increased. But a new report shows that more prescriptions don’t necessarily equate to higher overall costs.

According to the Innovation in Pharmacy Benefits: Mental Health is Health Report, the cost per person using mental health drugs fell by nearly 5% between 2020 and 2021, despite increases in the overall use of these drugs. The report was released last week by EmpiRx Health, a value-based pharmacy benefit manager, based on its claims data.

The report showed that mental health-related prescriptions increased by more than 9% between 2020 and 2021, with 75% of those prescriptions for antidepressants. However, according to the EmpiRx data, this increased drug use did not automatically increase costs at the same rate. For example, while antidepressant use increased by 12%, spending per claim increased by less than 2%.

Even more impressive results were reflected in medication use and costs for attention deficit hyperactivity disorder (ADHD). ADHD drug use increased by more than 20% year-over-year, but spending per claim for ADHD drugs actually decreased by 9%. Notably, ADHD prescriptions for adults 26 and older have steadily increased over the past three years, accounting for half of all ADHD medication users.

According to EmpiRx Health CEO Karthik Ganesh, the key to the company’s cost reductions lies in its “value-based” approach to pharmacy benefits, which is not typical in the industry.

Pharmacy benefit managers (PBMs) are companies that manage prescription drug benefits on behalf of health plans or large employers. PBMs typically define and manage the list of approved drugs for any given health plan or group and negotiate drug pricing directly with manufacturers. PBMs are, essentially, the drug middleman that sits between the health plan (and ultimately the consumer) and the drug manufacturer.

According to the Commonwealth Fund, major PBMs including CVS/Caremark, ExpressScripts and OptumRx dominate the market with a combined 79% market share. New entrants like Mark Cuban’s Cost Plus Drug Company and CivicaScript are trying to break in and change market dynamics by driving down costs specifically for generic drugs.

Conventional PBMs operate on a volume-based model, earning more money the more prescriptions they dispense. By buying in bulk and dispensing larger volumes of prescription drugs, PBMs are able to negotiate lower prices or better discounts. They share at least a portion of those savings with the payer — an insurer or employer.

Value-based reimbursement is a health care payment model that generally rewards providers of any kind for providing “the right care” to the “right people” at the “right time” (value) rather than rewarding providers for providing more of any service offer (SOUND VOLUME).

In the context of pharmacy benefits, a value-based model focuses less on how many prescriptions are filled and more on ensuring that the most appropriate drugs are dispensed. This approach may translate into the use of more tailored prescribing patterns for specific populations rather than a general application of general rules. According to Ganesh, value-based pharmacy benefit management often also incorporates a performance-based component so that the PBM performs better financially when the customer (insurers or employer) saves more. In this way, value-based pharmacy benefit management aligns financial incentives in a way that classic PBMs may not.

Ganesh said this approach reduces waste (or low-value spending), which is estimated to account for a quarter of total health care spending, and urged others to follow suit.

“PBMs need to make a fundamental shift from volume-based, condition-driven models of care to personalized population health management with whole-person care at its core,” he said.

Ganesh explained that population health management focuses on the health risks of groups of individuals and designs appropriate clinical approaches to improve the health of these groups based on the premise that different populations may need different clinical strategies.

“A population health approach uses a ‘less is more’ model to narrow down what is needed and what may be unnecessary for a particular population and patient,” Ganesh said.

He argued that pharmacists can play a central role in ensuring the appropriateness of medicines and ultimately reducing prescription drug costs for populations and individuals.

“Pharmacists sit at the crossroads of a patient’s care, reviewing and evaluating all drug therapies prescribed by various health care providers,” he said. “As the only professional who sees the full picture of a patient’s medication regimen and understands its implications, pharmacists are in a prime position to drive down wasteful pharmacy spending for both patients and benefit plan sponsors.”

Because pharmacists know what drugs are available and how they work for different people, Ganesh said they are in a good position to identify cost-effective alternatives to more costly drugs.

“By working directly with patients’ physicians, pharmacists influence more accurate prescribing choices that prevent excessive costs without sacrificing care,” he said.

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