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Specialty drugs drive costs; McAllen recommends Livinity PBM with $1.2M annual guaranteed savings
Summary
Staff told the commission that specialty medications — GLP-1s, injectables and cancer therapies — are the primary driver of pharmacy cost growth and recommended awarding the PBM contract to Livinity, which offered a $1.2 million-per-year guaranteed savings for three years.
Staff told the commission pharmacy is the plan’s toughest challenge, driven not by more prescriptions but by higher per-script ingredient costs for specialty medicines and GLP-1 drugs. Jolie Perez said the plan’s script counts remain stable but that specialty medications and injectables have raised costs dramatically: she cited examples including a single cancer-related increase that added about $600,000 in plan expenses and individual drug costs (Humira, Tabneos) that produced six-figure charges for single patients.
To address pharmacy costs, staff recommended awarding the PBM contract to Livinity (spelled in the presentation as Lavinity/Livinity) and said that Livinity’s proposal included a contractual guaranteed savings of $1.2 million per year for three years and greater formulary customization. "So it is our recommendation," Perez said, "in addition to all the other plan design components… Livinity also offers us much more control." Staff also said international sourcing/compounding saved the plan approximately $4.9 million over the last three years and reduced costs for certain GLP-1 treatments by about 22–42% per patient.
