A New Approach to Prescription Drug Negotiation is Emerging

For years, the U.S. pharmacy benefits system has relied on complex pricing structures that obscure the true cost of medications and make it hard for employers and patients to navigate their prescription drug benefits. Years of rising prescription drug costs in the U.S. has placed financial strain on employers, patients, and the broader healthcare system. A major driver of this dynamic has been specialty medications, including cell and gene therapies. Spending on cell and gene therapies is increasing rapidly, jumping 38% from 2022 to 2023 to a cost of nearly $6 billion. Treatments can cost hundreds of thousands of dollars, with some having a price tag as high as $4.25 million per therapy. While these drugs have revolutionized treatment for autoimmune diseases, cancers, infectious diseases, and cystic fibrosis, among other illnesses, the high price tag is raising the overall cost of healthcare for employers and patients.

In response, a growing number of organizations are challenging the status quo. In the past few years, forward-thinking models from market innovators have been reshaping the pharmacy benefits landscape and offering tangible, more transparent solutions. Unlike traditional approaches, which have long operated with obscure pricing structures, a new wave of PBMs and medication contracting organizations is reducing costs for employers, health plans, and patients.

These organizations have a commitment to passing along 100% of drug rebates directly to plan sponsors and to using advanced technology to provide better visibility into total drug costs. Employers, for example, who provide insurance benefits for more than half the country, now have access to more robust data that allows them to make informed drug purchasing decisions. This enables them to maximize value in the pharmacy benefits they offer employees. This transparency helps to reduce spending on prescription drug benefits and stands in contrast to many of the existing models, which have historically made real-time formulary management and pricing visibility more challenging for plan sponsors.  

A Smarter Strategy to Lower Drug Costs

While regulatory reforms remain an important component of addressing drug costs, industry solutions are additionally essential in driving change. Organizations that prioritize transparency, affordability, and accountability are offering effective alternatives to the traditional pharmacy benefit model.

For example, negotiating drug prices via a fully transparent and pass-through medication contracting organization can solve many of the issues in today’s system. This approach to drug pricing is proving successful in reducing costs while maintaining high-quality care. Synergie Medication Collective is leading the effort by negotiating directly with pharmaceutical manufacturers and passing all savings to participating health plans. These savings, in turn, help lower premiums and out-of-pocket costs for consumers.

In its transparent negotiating efforts, Synergie is utilizing several targeted strategies that have delivered measurable cost reductions, including:

• Medical rebate contracting: Synergie negotiates rebates on more than 100 preferred medical drugs, ensuring that participating health plans receive the full financial benefit of these savings.
• Specialized solutions for high-cost therapies: With the rising costs of advanced treatments, Synergie provides financial protection and patient support programs that reduce the burden of expensive therapies and at the same time facilitate access to top-tier treatment centers.
• Value-based contracting: By holding pharmaceutical manufacturers accountable for treatment success, Synergie ensures that drug costs are tied to real-world patient outcomes. If a therapy does not meet clinical benchmarks, manufacturers must issue refunds, which reduces financial risk for health plans.

These strategies are particularly important for managing the high costs of specialty medications. Through the scale of the BCBS plans and their common goals of providing access to safe and effective medications at the lowest net costs, Synergie secures better pricing and ensures that cost savings are directed to those paying for care. This approach avoids misaligned incentives and ensures that medical and pharmacy benefits serve the interests of employers, health plans, and patients.

The Future of Pharmacy Benefits

The prescription drug supply chain is at a turning point, and forward-thinking collective negotiation organizations, like Synergie, are proving to be effective strategies for making medications more affordable.