Cutting Wasteful Drugs Can Save Employers Billions

September 17, 2020

Researchers from Johns Hopkins University along with The Pacific Business Group on Health released a guidebook that identifies 49 medications that could be cut from the lists of drugs covered by employers in favor of less expensive alternatives. After pushing its approach to large employers for two years, the group is shifting its focus to mid-sized companies through conferences, webinars, and an online Excel sheet that allows companies to identify savings.

Senior Director of Member Value for the coalition, Lauren Vela, said, “There are so many folks making so much money on the existing system that the folks who really know how the system works don’t have an interest in changing it.” According to Vela, eliminating low-value drugs from formularies can result in savings between 3% and 24%.

However, manufacturers aren’t taking this laying down. They are pushing back and challenging the notion that certain drugs are wasteful. “Decision-making power on what medicines patients should take should rest with doctors,” Katie Koziara, a spokeswoman for the Pharmaceutical Research and Manufacturers of America. Read more here.

(Source:John Tozzi, Bloomberg News, September 14, 2020)

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