I used to manage the budgets for employee benefits at a large firm, and having an employee on the payroll that incurs a $100,000 a yr in drug/treatment cost will substantially effect the employer (or employee, depending on who pays) premiums for that benefit. This premium goes straight to the bottom line, i.e the premium charged is based on individual company averages, not the average of all people (across the state or country) who use that insurance agent.

So . . . either ALL employees will end up sharing increased costs, by paying a larger % of their salary towards these costs, or the employer loses a % of income they would otherwise have (if they are paying the premium for the employees).

These costs have never been absorbed by the insurance companies as they are there to MAKE MONEY (just like our employers and the pharma companies that charge UNNECESSARILY high costs for these drugs!). If the insurance company starts paying out more for prescriptions (this new annual cost/premium is re-calculated annually), it is reflected in the new premiums for the employers (which may or may not be charged back to employees).

For instance, if the payroll costs for a company are $500,000 per year, and the prescription costs for the insurance agent has been $50,000 per year, the % of direct costs are:

$ 50,000
$500,000 = 10% of every dollar paid out in wages goes to paying for prescriptions.

= Total cost for employees, if paid by employer: $550,000.

Now if someone who takes, say Tysabri @ $100,000 a yr, is suddenly incurring that cost in the plan:

$150,000
$500,000 = 30% of every dollar paid out in wages goes to paying for prescriptions (or a 200% increase in premiums)

= Total cost for employees, if paid by employer: $650,000.
OR
= If the premium costs are passed on to employees: 30% of their salary is now deducted to pay for the prescription costs/increased premiums of everyone in the plan.

My question is . . . who SHOULD pay this cost?

Cherie