Drug benefits are the fastest-growing portion of overall healthcare benefit costs for employers – and have increased at an alarming rate for decades. On July 9, 2019, SHRM Hawaii Island Educational Foundation hosted a seminar on Pharmacy Benefits Management in Hilo.

The program explored how to manage prescription drug costs and was presented in partnership with Atlas Benefits Consulting. Bonnie Lee Pang introduced the topic and speakers Avi Pelta, Regional Sales Director, and Brent Stokes, Account Executive from Confidio Pharmacy Solutions. Avi presented an overview of how drug benefits work and discussed trends in the industry. Brent focused his presentation on contracting and risk mitigation. Participants learned how improved pharmacy benefits management provides employers with a way to gain some leverage on these benefits so that health plans are not swept away in the torrent of price increases for prescription drugs.

Key takeaways:

  1. The industry is consolidating within the pharmacy providers and they, in turn, are consolidating with large health carriers. The upshot of this consolidation should give greater power to negotiate with large pharmaceutical manufacturers; however, that is not happening. The end-consumer and the employer-consumer are simply paying the bill that is passed along by these giants. “Pharma wins again!”
  2. The health issues that drive costs and utilization are inflammatory conditions, diabetes, and oncology. There is a large opportunity for coordination of care of these conditions to provide improved outcomes at lower costs; however, such coordination has yet to come about.
  3. Beware of rebates to be sure that they operate for the plan’s benefit and not simply for a larger profit to the pharmacy benefit manager that is now more likely to be controlled by the insurance company.


What is an employer to do?

Confidio recommends self-insurance so that the contracting for these services are direct and all the issues can be tracked and understood. This seems like a solution that only a large employer could pursue, however, Confidio states that smaller employers can join forces to offer drug benefits as a coalition.  Short of such an involved solution, the recommendation is to ask three questions:

  • What are my premiums paying for?
  • What reporting can I receive about our group’s utilization?
  • Is our plan operating as efficiently as it should? If not, what needs to be adjusted?


Pharmacy benefits management is a complex area for the HR professional to undertake. Fortunately, there are consultants who can guide you through the process to develop an affordable program employees and better control costs.