Moving On From COVID-19

Top Rx Utilization Trends & Vaccine Questions Answered


For most employers, the financial uncertainty brought on by COVID-19 has caused their well-intended budget forecasts to be unsteady at best. Business leaders faced tough decisions, including whether to furlough staff, reduce employee pay, or cut employee benefits. As companies across industries look forward this year, it’s a prime opportunity to be an advocate and resource for employers so that you can support them in a new and different way. Focusing on prescription drug benefits will provide you with the most significant opportunity to generate savings for your clients and can mean the difference in how they recover and return to the “new normal.” Employed patients make up at least 30% of the nation’s total COVID-19 cases and counting. More than half of those cases are employees of small companies with fewer than 500 employees.


In any given year, evaluating prescription drug utilization trends can be challenging. It’s more important now than ever to understand how COVID-19 has impacted your clients’ benefits budgets. Going forward, it will be important to analyze the plan’s prescription drug utilization data to understand what is driving the group’s specific trends and patterns. As you look at the data set, an important part of that analysis includes deciphering what was a result of COVID-19 and what is expected to be part of the group’s new normal. Only then can you begin to consider which clinical programs to put in place to manage appropriate prescription drug utilization for 2021.

As companies across industries look forward this year, it’s a prime opportunity to be an advocate and resource for employers so that you can support them in a new and different way.

Here are several key things to keep in mind as you review 2020 drug trend data:

  1. Changes in Enrollment – As the virus wreaked havoc on businesses and industries across the country, we saw member enrollment numbers shift up and down. For those impacted companies, enrollment shifts could mean a higher per member per month (PMPM) pharmacy benefits cost. As you evaluate any PMPM spikes over the last year, dig in a little deeper to see if it’s because of membership fluctuations and the prescriptions they are using.
  2. Changes in Drug Mix – The most significant shift in 2020 occurred in acute to chronic condition prescriptions. With people sheltering in place for much of the year, there was a clear reduction in prescriptions for temporary ailments like sinus infections, strep throat and muscle strains. However, there were more prescriptions for chronic conditions, including diabetes, high blood pressure and other conditions that require daily medication therapy. AAs companies across industries look forward this year, it’s a prime opportunity to be an advocate and resource for employers so that you can support them in a new and different way.dditionally, some of the newer COVID-19 therapies, including Veklury® (Remdesivir), which was approved by the U.S. Food and Drug Administration (FDA) in October 2020 for the treatment of COVID-19 in patients 12 years and older who require hospitalization, are very costly. Drug mix matters because acute condition prescriptions typically are inexpensive generics or lower-cost brand drugs. Without those drugs in the product mix, the change in the plan’s average PMPM cost may be substantial despite reducing the volume of drugs.This phenomenon is likely short-term, as we expect the number of acute condition prescriptions to tick back up over 2021.
  3. Changes in Quantities Dispensed – There was a notable shift from 30-day to 90-day maintenance medication fills and increased mail-order prescriptions. These trends likely will continue throughout 2021. Because of the convenience and potentially lower costs, once members make that shift, they are more likely to stay with it.
  4. Changes in Medical Costs – Reductions in cost due to lower utilization of specific medical services may offset some unplanned COVID-19 expenses. For example, postponed or canceled elective surgeries and procedures, physician office and clinical lab visits, and other outpatient services may help counterbalance an employer’s added costs for COVID-19 testing and treatment. This shift may help employers manage some of their medical benefits costs; however, we expect companies to see higher healthcare costs from hospitalizations related to the virus. Businesses with employees in high-risk categories, such as older workers, front-line workers, or those more prone to chronic illness (e.g., the logistics industry faces a well-known challenge with diabetes and pre-diabetes impacting long-haul truck drivers) will suffer a larger impact. Employees who are infected and recover from COVID-19 may face different health issues long-term, and we do not yet know what new high-cost drugs may come to market to address them.
  5. Changes in Progressive Trend Expectations – Looking at your clients’ trend from quarter to quarter, you usually see a natural trend progression throughout the year. It’s a natural part of how benefits are designed today, with deductibles and people paying more at the beginning of the year. In 2020, however, we saw a discernible difference in how drug trend progressed. By December, it was beginning to shift back to what we consider a more normal range for the year but not quite back to net-neutral of what we expected without COVID-19. This change is indicative — and encouraging — that we might be starting the year with a trend pattern more in line with what we would typically see. There’s no doubt that the next several months will be trying, and the vaccine roll-out schedule will be confusing. Each organization will have to make tough decisions in the best interest of its business, company culture, and employees. Leadership teams will have to decide how to get their people back to work safely and appropriately.


There is an overwhelming amount of information from various sources on the COVID-19 vaccine, with limited details on the implications for employers. There are critical questions and concerns that employers and their employees are thinking about, and so it’s important to understand how to effectively consult with employers on what the vaccine means for their business, their member population and their pharmacy benefits program.

Are the vaccines safe? The FDA has a review process to issue Emergency Use Authorizations (EUA) before vaccines are authorized for use by the general public. All vaccines approvals are based on the FDA’s rigorous scientific guidelines for verifying vaccine efficacy and safety. Search for the Washington Post’s vaccine tracker for up-to-date information on how many doses of the vaccine are being sent to each state. It’s important to note that the vaccines have not been approved for pregnant women or children; results from trials in children likely won’t be available until mid-to-late 2021.

How does the vaccine work? Vaccines are intended to prevent the vaccinated person from getting seriously ill, not to prevent the spread of the virus. This means that although the efficacy rates are very high, transmission of the virus can still occur, which is especially important to remember in workplace situations where some people are vaccinated and others aren’t. It’s recommended that all people stay cautious and continue to wear masks, practice frequent hand-washing, and socially distance until at least a majority of the population is vaccinated.

Who is paying for the vaccine? During the initial phase of limited vaccine supply, federal funding authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act covers the ingredient cost of the COVID-19 vaccine. As established in the CARES Act, members receive the vaccine at no out-of-pocket cost and no deductible, regardless of whether they get it at an in-network or out-of-network pharmacy, with employers covering the costs of vaccine administration. This means that both fully insured and self-insured pharmacy benefits plans will be required to pay for the administration of the vaccine. Employer Group Waiver Plans (EGWPs) can allow coverage for the administration fees but incur additional financial risk.

What is the vaccine administration fee? During this time, pharmacy benefits administration fees are expected to align with or near the published reimbursement rates from Medicare Fee for Service: around $17 for the initial dose and $28/$29 for the second dose. For one-dose vaccines, it would be around the $28 price point. One PBM stated they plan to put the COVID-19 vaccine under the pharmacy vaccination program, along with the yearly flu vaccine. For that program, there would be a $0 ingredient cost, but plans would see a typical vaccine admin fee of $20 plus a dispensing fee for it.

How will the COVID-19 vaccine claims be processed? PBMs are working with NCPDP to set up benefits and process claims under the pharmacy benefit that meet the NCPDP guidelines, which are published
in the NCPDP Emergency Preparedness Guidelines. Vaccines will adjudicate as brand medications. Consistent with current vaccine strategy, COVID-19 vaccines are not rebate eligible and are not included in the calculation of rebate guarantees.

2021 will be a defining year for many HR leaders – and you are in prime position to help them achieve the cost savings and member experience they want and need.


Employers also will be wondering how other companies are approaching the vaccine roll-out for their employee populations and looking to you for advice. Here are several considerations worth discussing with your clients to ensure they are prepared:

Will a vaccine be mandated for people in your state? In October 2020, each state was required to submit to the CDC their own roadmap of their vaccine plan, including distribution, prioritization and mandates. In some states, such as Virginia for example, the Health Commissioner has authority to mandate immunizations during a public health crisis if a vaccine is available. Employers will be able to set up benefits
to meet the applicable regulations, and so employers should be aware of requirements in their particular state.

Will a vaccine be mandated for employees in certain job functions? Employers also are seeking clarification as to what the vaccine means for their industry to open up as well as the implications for specific roles. Will proof of a vaccine be required to attend indoor events? Will all airlines require employees and travelers to get the vaccine? Some international airlines already have added this as a requirement for travel.

How will unvaccinated employees be protected? Because vaccines don’t prevent the spread of viruses, vaccinated employees still are contagious if they contract COVID-19. Until a large majority of the general population is vaccinated, it is wrong to assume that things can resume to pre-COVID operations. High-risk employees who choose not to vaccinate, those who are allergic, and women who are pregnant remain at risk of exposure. Workplace precautions must be maintained for their protection.

How will you overcome vaccine hesitancy in your workforce? Vaccine hesitancy refers to a person›s delay in acceptance or refusal of vaccination despite availability of vaccination services. Despite the toll COVID-19 has taken, many people in the U.S. are concerned about a vaccine. However, history shows that achieving herd immunity is possible only through vaccination. Being cognizant of employee concerns is important to be able to address them in a timely and appropriate manner.

How will you balance vaccination costs with other benefits-related costs? The COVID-19 vaccine will be managed in a similar manner to other preventative vaccines. In general, clients can choose to cover the administration cost through their medical and/or PBM pharmacy benefit. As established in the CARES Act, patients are to receive the vaccine at no out-of-pocket cost and no deductible, regardless of where they get the vaccine. Employer Group Waiver Plans (EGWPs) are able to allow coverage for the administration fees but would incur additional financial risk.

What communication and outreach will you do to support member adherence to the second vaccine dose? Some PBMs and retail pharmacies are planning multi-pronged communications that include email, IVR and text messaging to remind members about their second dose appointments. Employers should determine how they will support those efforts and relay messages using their established communication channels.

With a still relatively uncertain future ahead as things slowly begin to normalize, 2021 will be a defining year for many HR leaders – and you are in prime position to help them achieve the cost savings and member experience they want and need. This includes giving careful consideration to the points discussed above, as well as delivering innovative ways to address the prescription drug cost challenges they already were facing. Your employer clients will need a risk management solution that ensures only the most clinically effective, lowest cost medications are being utilized. Independent clinical oversight from a pharmacy benefits optimizer can help them manage and reduce their pharmacy benefits spending, while preparing them for what’s to come.

RICK SUTHERLAND works in business development for RxBenefits, the nation’s first Pharmacy Benefits Optimizer. He supports brokers in the California and Hawaii regions, guiding them through the pharmacy benefit contracting process to help them evaluate their clients’ prescription drug plans for optimal savings, clinical management and service. Rick is also the current board president for the Employee Benefit Planning Association of Southern California (EBPA). He can be reached at