Insurers Move to Blunt Employers’ Use of Alternate Drug Plans

Major health insurers are forcing small and mid-sized employers to use the insurers’ pharmacy benefit management services, a move that is preventing the employers from taking steps to reduce their medication costs.

Benefits consultants and insurance brokers say insurers like Aetna Inc. and Cigna Corp. are keeping employers from reaping sizable savings, in some cases by threatening them with punitive administrative fees if they abandon the insurers’ PBMs.

The gambit comes as employers are under intense pressure to hold down rising drug costs. National spending on retail drugs totaled $335 billion in 2018, 2.5% higher than in 2017, according ...