Lowering Pharmacy Benefit Cost: A Case Study

Posted by Navitus Health Solutions on Oct 31, 2019 8:00:00 AM

Think lowering your pharmacy benefit costs is impossible? Recent headlines and studies make savings seem allusive as costs continue to skyrocket.

For example: 

  • By 2023 drug spend is expected to increase to over $420 billion per year.1
  • In the first half of 2019, the average price increase per drug was 10.5%, about five times the rate of inflation.2
  • One in four people currently taking a medication find it difficult to afford their medicine.3

With statistics like these, plan sponsors are feeling the pressure to find a solution. The good news is that savings are possible. Find out how one plan saved millions on their pharmacy benefit spend by choosing a pass-through pharmacy benefit manager (PBM).

Identifying opportunities for savings

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Concerned about growing prescription expenses, the State of Montana knew it was time for a change. With its traditional PBM, costs reached levels equating to almost 20% of its total plan spend.

This triggered its search for a fully-transparent PBM who could help manage its growing prescription costs.

developing a better pharmacy benefits plan

Through its partnership with Navitus, the State was able to improve performance and effectively reach its goals by implementing a few key solutions.

Improving Formulary Management Performance: A new formulary provided access to high-quality, clinically-effective medications to improve member health and deliver the lowest net cost. 
Creating Network Savings: A limited network helped lower costs and increase savings opportunities. Members experienced minimal disruption and were able to transition prescriptions to the convenient limited network pharmacies with ease.
Implementing a High-Touch Specialty Pharmacy Program: A cohesive specialty pharmacy program with Lumicera Health Services was essential to help better manage expenses in this high-cost segment. 

The implementation of these programs and other cost-reduction strategies resulted in a significant decrease in total net cost in the first year. With Navitus’ unique pass-through model, 100% of all discounts and rebates received were passed directly back to the State.

Want to see more results?
Download the full case study to find out how the State of Montana achieved a 28.8% decrease in total net cost in the first year!

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  1. The Year Ahead: Pharmaceuticals & Healthcare In 2019. Fitch Solutions.
    store.fitchsolutions.com/the-year-ahead-pharmaceuticals-healthcare-in-2019. Published November 2018.

  2. Mole B. 879% drug price hike is one of 3,400 in 2019 so far; rate of hikes increasing. ARS Technica. https://arstechnica.com/science/2019/07/big-pharma-raising-drug-prices-even-more-in-2019-3400-hikes-as-high-as-879/. Published July 2, 2019. Accessed September 24, 2019. 
  3. Kamal R, Cox C, McDermott D. What are the recent and forecasted trends in prescription drug spending? Peterson-Kaiser Health System Tracker. https://www.healthsystemtracker.org/chart-collection/recent-forecasted-trends-prescription-drug-spending/. Published February 20, 2019. Accessed September 16, 2019.


Topics: Case Studies

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