Common Sense Solutions to Combating Fraud, Waste, and Abuse

More than a decade ago, an estimated 30% of U.S. healthcare spending—approximately $750 billion—was wasted on unnecessary services, excessive administrative costs, and fraud.¹ With healthcare costs having risen sharply since then, the financial impact of fraud, waste, and abuse (FWA) today is likely even more staggering.

Fortunately, much of the FWA within pharmacy benefits can be curbed through smart plan design, proactive clinical management, and oversight.

What is Fraud, Waste, and Abuse in Pharmacy Benefits?

Fraud involves knowingly and willfully providing false information, misrepresenting facts, or engaging in deceitful practices for illegal or unethical gain at the expense of others.

This can take many forms:

• Medical identity theft
• Patients acquiring prescriptions under false pretenses
• Providers writing illegitimate prescriptions
• Pharmacies processing phantom claims or billing for services never rendered

While proving fraud is challenging, it can be deterred through claims monitoring, routine audits, and vigilant oversight. These efforts help identify suspicious activity and unethical behavior and ensure plan resources are used appropriately.

Waste is the excessive, unnecessary, or inappropriate use of healthcare resources. It is often the result of carelessness, mismanagement, or a lack of oversight rather than malicious intent. Examples include:

• Prescriptions filled but never taken
• Using high-cost alternatives when lower-cost, equally effective options exist

Waste can be reduced through oversight, plan design incentives, and educating patients about medication adherence and lower-cost, high-value drug alternatives.

Abuse typically refers to excessive or improper behavior that conflicts with accepted medical or operational standards. Examples include:

• Medications used for non-medical purposes
• Therapeutic duplication or overutilization
• Diversion of medications for resale or misuse²

While “abuse” is often associated with opioids, this issue can extend to muscle relaxants, stimulants, and other categories of drugs. Utilization management programs can help identify patterns like overuse, duplication, or off-label prescribing, and intervene early.

National CooperativeRx’s Common Sense Solutions

At National CooperativeRx, we act in the best interests of our member-owner groups by proactively identifying and implementing robust programs that strengthen plan safeguards.

Our in-house, no-additional-cost clinical programs are designed to tackle FWA head-on through:

• Comprehensive utilization management strategies
• Continuous surveillance of high-cost, low-value medications and new-to-market medications
• Diligent oversight of pharmacy dispensing patterns to detect irregular or potentially problematic activity
• Common sense approaches to medical foods and devices
• Ensuring appropriateness of products applicable to medical or dental benefits

These common sense solutions deliver tangible results. In 2024, our clinical programs contributed to over $66 million in cost avoidance.

FWA prevention and oversight is nothing new for National CooperativeRx—we began developing our custom initiatives in 2014, and we have continued to expand and refine our strategies ever since. Our in-house clinicians actively monitor the industry and develop targeted solutions that address emerging trends. In 2024, we started an optional custom antidiabetic GLP-1 management strategy, and in August 2025, we are launching a home-based light therapy program to further manage psoriasis costs. These initiatives demonstrate our commitment to evolving with the pharmaceutical landscape, ensuring we deliver the best value and care for our members.

Ready to Take Action?

National CooperativeRx member groups are automatically enrolled in our Specialty Prior Authorization and Pharmacy Network Oversight Programs. To take advantage of any of our other in-house clinical programs or to learn more about enhanced offerings, member groups can contact their National CooperativeRx Account Representative.

If you are not currently a member of National CooperativeRx and want to learn how membership can help your plan achieve substantial savings, please contact us. We can provide detailed savings illustrations and highlight clinical savings opportunities specific to your plan.