Mental Health Drug Usage Rose In 2021, But Not All Pharmacy Costs Did, New Report Shows

As the mental health burdens have increased during and even before the pandemic, use of mental health medications has similarly increased. But a new report suggests that more prescriptions does not necessarily equal higher overall costs.

According to the Innovation in Pharmacy Benefits Report: Mental Health is Health, costs per person using mental health medications declined by nearly 5% between 2020 and 2021, despite increases in overall utilization of these medications. 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 more than 9% between 2020 and 2021, with 75% of those prescriptions for antidepressants. However, in EmpiRx’s data, that increased medication usage didn’t automatically drive up costs at the same rate. For example, while antidepressant utilization increased by 12%, spending per claim increased by less than 2%.

Even more dramatic results were reflected in medication usage and costs for attention deficit hyperactivity disorder (ADHD). ADHD medication usage 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 increased consistently over the past three years, accounting for half of all ADHD medication utilizers.

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

Pharmacy benefits managers (PBMs) are companies that manage prescription drug benefits on behalf of health plans or large employers. PBMs typically set 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 medication middleman standing between the health plan (and ultimately the consumer) and the drug maker.

According to the Commonwealth Fund, large PBMs including CVS/Caremark, ExpressScripts, and OptumRx dominate the market with a combined market share of 79%. Newcomers such Mark Cuban’s Cost Plus Drug Company and CivicaScript are trying to break in and change the market dynamics by lowering costs on generic drugs specifically.

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

Value-based reimbursement is a healthcare payment model which generally rewards providers of any sort for delivering “the right care” to “the right people” at “the right time” (value) rather than rewarding providers for providing more of whatever service they offer (volume).

In the context of pharmacy benefits, a value-based model focuses less on how many prescriptions are dispensed and more on ensuring that the most appropriate medications are dispensed. That approach may translate into using more tailored prescribing patterns for specific populations rather than applying general rules across the board. According to Ganesh, value-based pharmacy benefits management often also incorporates a performance-based component such that the PBM does better financially when the client (insurers or employer) saves more. In this way, valued-based pharmacy benefits management aligns financial incentives in a way classic PBMs may not.

Ganesh said this approach reduces waste (or low-value spending), which accounts for an estimated one-quarter of healthcare spending overall and urged others to follow suit.

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

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

“A population health approach utilizes a ‘less is more’ model to cut through what is needed and what may be unnecessary for a specific population and a patient,” Ganesh said.

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

“Pharmacists sit at the intersection of a patient’s care, reviewing and assessing all medication therapies prescribed by various healthcare providers,” he said. “As the only professional that sees the patient’s full medication picture and understands its implications, pharmacists are in a prime position to drive out 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 well positioned to identify cost-effective alternatives to the most costly drugs.

“Working directly with patients’ doctors, pharmacists influence more precise prescribing choices that prevent excessive cost without sacrificing care,” he said.