Mental health drug utilization is going up — but costs don't have to

While most employers may equate higher use of medications to higher costs, it seems the latest study could prove them wrong.

EmpiRx, a pharmacy benefit manager, found that behavioral health-related medication drove an increase of nearly 10% in pharmacy claims for their clients. But while drug utilization for mental health needs rose in the last few years, employer costs did not. In fact, EmpiRx saw a nearly 5% drop in plan spend per utilizer — in other words, employers saved money despite employees seeking more pharmaceutical care. 

"It comes down to our model," says Karthik Ganesh, CEO of EmpiRx Health. "We are moving from higher-cost medications to clinically appropriate yet lower-cost medications. We are not allowing patients to be on multiple medications that work against each other. We are buying for value, not volume." 

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EmpiRX is a value-based PBM, meaning they only make a profit if they save the employer money in a given year. Ganesh warns employers to be wary of traditional PBMs, who often offer discounts without any guarantee of lower overall spend.  

"The only way a PBM can work with a manufacturer and get deeper discounts is by promising the manufacturer more volume," says Ganesh. "We have a healthcare system heavily motivated by volume because more patients and more utilization usually means more money. But we have completely lost track of the fact that more is never better."  

A study published in the Journal of the American Medical Association found that 25% of healthcare spending, or nearly $1 trillion, goes to waste due to factors like poor care coordination between healthcare providers, over-treatment and unnecessarily expensive medications. Ganesh and his team are working to minimize that waste for their clients by connecting with physicians to identify the most cost-effective medication for its members. 

"This is not just us arbitrarily saying what a patient needs," says Ganesh. "This is us working with physicians and figuring out what a patient doesn't need, and lower-cost alternatives. We can get to a multitude of answers."

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This has made a world of difference in employers' health plans and employee health. EmpiRx's data also revealed a 93.5% medication adherence rate, meaning that employees can afford to take the medication prescribed to them. Notably, EmpiRx's anti-depressants utilization increased by 12% while gross spend per claim dropped by nearly 2%, and ADHD medications increased by 20% while seeing a 9% drop in gross spend. 

However, more utilization isn't always good. Drug overdoses increased by nearly 30% in 2021, with opioids accounting for a majority of deaths. EmpiRx, on the other hand, reported a 10% reduction in opioid utilization the same year. Additionally, the PBM noted a 14% increase in patients seeking treatment for opioid use disorder.

"Our care model is essentially hand-to-hand combat," says Ganesh. "We have our clinicians working directly with the patients to make sure that they are sticking to their meds or seeking appropriate treatment. But it's still heartwarming to see our patient base seeking help."

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Ganesh points out that it's especially vital for EmpiRx to keep up with mental health needs in the face of the pandemic. He predicts struggles with anxiety and isolation will continue, and utilization rates are unlikely to waver. Ganesh underlines that hesitancy to take action will only make matters worse. According to the American Psychiatric Association, the U.S. economy loses over $200 billion a year in absenteeism, reduced productivity and medical costs associated with untreated mental illnesses. 

Ganesh encourages employers to challenge their benefits consultants and rethink their relationship with the pharmaceutical industry. Employers may not be able to afford to maintain the status quo. 

"As a society, we should be doubling down and supporting anyone who is challenged from a mental health standpoint," he says. "It's the right thing to do as humans, but it's also what right for everyone's pockets."

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