As a community, we accomplish more together than we can alone. The support of a community becomes even more important when faced with challenges from multiple directions. National CooperativeRx is steadfast in navigating pharmacy complexities, our community expects it. The last few years have been a challenge for many. Complexities in the prescription drug marketplace add to the challenges plan sponsors are experiencing in attracting and retaining talent. For the Cooperative, 2022 was another strong year. 2023 brings new management efforts, each with the best interest of patients and our membership at the center of every decision. This management is critical as prescription drug trend escalates.
In 2022, 24 new members joined the Cooperative, bringing an expected count of over 28,000 new lives. We anticipate the Cooperative to exceed 435,000 total lives when the final numbers come in. Our growth delivers purchasing power and resources to expand our offerings. One key element of our staff reorganization in 2022 was to empower our strategic account executives to assist groups interested in joining the Cooperative. We feel this will make for a more efficient and effective process and lead to higher growth in 2023. 500,000 lives is within reach!
The Cooperative’s strong financial performance continued in 2022, and as a result, we are again expecting a significant membership dividend. With various returns and recoveries all passed through to membership, we expect to book net income of roughly $1 million for 2022. Our solid financial position continues to allow for early equity retirement and investments that add additional value for our members.
Changing Cost Dynamics
Healthcare costs are trending up. The full impact of recent inflationary pressures will be apparent in healthcare over the next few years. The prescription drug market is once again contributing to healthcare trend at a higher pace. Price increases, expensive new therapies breaking launch price records, and new utilization for certain classes are all driving trend. While we view PBMs as allies in the fight to control prescription drug costs, their profits have been rising at a faster rate as well.
Payors and patients have been asking for prescription drug reforms for a long time. Well, in 2022, we got reform. In 2023, we might start to get a picture of what impact the Inflation Reduction Act will have. The full impact of this reform will not be seen for many years. The cost impact for employers could be positive or negative but is expected to be minimal.
The greatest marketplace relief will come with additional biosimilars. The U.S.’s number one selling drug, Humira, will lose exclusivity in 2023, with competition coming towards the latter half of the year. Other high-spend medications will lose exclusivity in the coming years. Navigating this changing dynamic is important to maximize value for plan sponsors as soon as possible.
With great pressure on costs, some payors have jumped to various sources of alternative funding to offset the costs of medications. The Cooperative has navigated these waters for employers and provided education on considerations before jumping into this complex space. As expected, there are signs these waters may start to dry, and payors who jumped to shiny new solutions will be left with PBM contract performance that is far from best-in-class.
Cooperative-Led Rx Cost Controls
Through all the noise, National CooperativeRx works to combat trend and is laser-focused on management to drive to the lowest net cost of prescription medications. The Cooperative is constantly assessing programs in this marketplace. We do this on behalf of members, with a long-term outlook.
The Cooperative worked with CVS Caremark to put enhanced management of Psoriasis spend in place for members starting in 2023. This program will more closely manage the growing Psoriasis class to ensure patients do not jump right to an expensive medication if an alternative therapy with fewer side effects provides better treatment. While this effort does reduce the Cooperative’s rebate value, it drives a lower net cost for our membership.
Sometimes the Cooperative identifies a member need and can develop an in-house solution. Several existing Cooperative led clinical solutions are already providing value to members and patients. On January 1, 2023, National CooperativeRx staff successfully brought prior authorization oversight for all specialty medications in-house. This provides more concierge service to patients, education to providers, and leads to better health outcomes at lower costs.
Producing and maintaining a strong contract with a pharmacy benefit manager is a core function of National CooperativeRx. While we begin work on a market check for improved pricing January 1, 2024, work has already begun on 2025, a new contract year. This additional time is to ensure we consider all the complexities of this marketplace and develop solutions that are best for our members. Market check achievements will be available mid-year with new contract options available in early 2024.
National CooperativeRx was founded to bring purchasing power and expertise to pharmacy benefits management. We continue to innovate, promoting high-value spend for patients and plan sponsors. Everything we do is with our members’ best interests in mind. Thank you for being a part of the National CooperativeRx community as we continue to solve the complexities in the prescription drug marketplace. We look forward to serving you in the new year and beyond!