How employers can take back control of unnecessary pharmacy spending

Sometimes it seems like prescription refills just show up on your doorstep, whether you asked for them or not. If you use a mail order pharmacy, refills are often triggered weeks before you’ve exhausted the supply of your prior fill. If you’ve ever filled a maintenance medication at a retail pharmacy, chances are you’ve been on the receiving end of multiple calls and text messages encouraging you to swing by and pick up a refill long before it’s needed.

For most patients, this kind of convenience feels like a win. After all, nobody wants to run low on a critical medication. And many employers pay little attention to the automated refill programs (or “auto-refill”) running in the background of their pharmacy benefit program, viewing it largely as a way to offer a better benefits experience to their plan members. But behind the scenes, auto-refill can quietly drive health care costs higher, create medication oversupply, and drive massive financial windfalls for some pharmacy benefit managers (PBMs) while patients and employers foot the bill. Despite their good intentions, auto-refill practices often operate with little oversight, turning a helpful feature into a hidden liability.

Auto-refill promises often overshadow reality

Auto-refill is often promoted to employers as a means of supporting successful drug adherence among patients. Some research even shows that auto-refill can improve medication adherence by making sure members don’t fall short of their needed supply. And while it’s true that auto-refill practices can result in higher statistical adherence results, patients can potentially receive a far greater supply of a medication than what is needed for a successful therapeutic outcome.

Medication Possession Ratio (MPR) is a commonly used metric to assess medication adherence. It measures the proportion of time a patient has access to their prescribed medication. Calculating MPR is simple: divide the total days’ supply of a medication dispensed by the number of days in the measurement period, which is usually a year. While most PBMs report this statistic in the range of 0% to 100%, in the real world, MPR can far exceed 100%.

Let’s imagine that a mail order pharmacy sends an initial 90-day supply of a medication to a patient, and then triggers delivery of an automatic refill after 60 days. If this continues for the remainder of the year, the plan sponsor could potentially end up paying for 18 months of treatment, and the patient ends up with 1.5 times the supply they actually needed for that one-year period. That equates to an MPR of 150%.

It's good practice for patients to have a reasonable extra supply of their maintenance medications on hand. Unexpected events like severe weather or delivery delays can disrupt access, and having a safe backup supply helps ensure continuity of care during those times. But this safety net should balance clinical need against cost and the potential for waste. While two weeks of extra supply may be reasonable, few clinicians would argue that a patient needs 180 days of surplus medication sitting in their medicine cabinet.

What happens to excess medication that a patient accumulates due to auto-refill? In some cases, it is stockpiled by the patient and utilized in the future, perhaps after the patient is no longer covered under the employer’s benefit plan. Medications that exceed their expiration date may be discarded by the patient, becoming a form of pure health care waste. Some excess medications are absent-mindedly flushed down drains and end up as pharmaceutical contamination in water supplies. And in the worst-case scenario, stockpiled drugs may be diverted by the patient, shared with family or friends as a favor, or sold for personal profit. The rising popularity of some drug classes (such as GLP-1s) has fueled an active black market for certain stockpiled medications.

For vertically-integrated PBMs (those that own dispensing pharmacy assets), auto-refill protocols can be an engine for revenue growth – at the expense of employers and patients. Since these traditional PBMs control both the approval of early refill claims and the dispensing of the drug, they serve as both a gatekeeper and a profit center for each refill. Allowing their own specialty pharmacy to automatically refill prescriptions just 7 days early for a sequence of 30-day prescription refills can result in the dispensing of 480 days’ supply in a single year, an oversupply of more than 100 days. And with some specialty medications costing hundreds or even thousands of dollars per day, the costs of this oversupply can add up quickly.

Related: Trump prioritizing PBM reform to cut drug prices, RFK says

In my more than two decades of running request-for-proposal (RFP) processes in the benefits industry, I’ve seen countless examples of this type of over-dispensing waste. In some cases, the employer was unaware that the auto-refill practice was even occurring. In one real-life example, an employer discovered that a plan member taking Humira, a common treatment for rheumatoid arthritis, had accumulated nearly 90 days in excess supply in one year, resulting in $40,000 in unnecessary plan spend. Similarly, GLP-1s are already costing employers up to $16,000 per year, but over-dispensing can rack up nearly $23,000 in additional plan costs for a single patient. Extrapolating these scenarios across thousands of utilizers, it’s easy to see how auto-refills could quietly drive millions of dollars of waste across a large health plan.

How can employers reduce waste and take back control of pharmacy spend?

It’s no secret that pharmacy costs are rising for employers. According to the Business Group on Health’s 2025 Employer Health Care Strategy Survey, the median percentage of health care dollars spent on pharmacy rose from 21% in 2021 to 27% in 2023, and 76% of employers reported being “very concerned” with overall pharmacy cost.

Fortunately, a few simple actions can dramatically mitigate the financial impact of auto-refill-driven waste for benefit plans. By taking the following three actions, employers can more effectively manage medication oversupply and over-dispensing for their populations, reducing systemic waste and improving the efficiency of their benefit.

Understand which members are being over-supplied. Ask your PBM for an anonymized report of all members with a Medication Possession Ratio (MPR) exceeding 100%. This report will reveal trends in dispensing and may offer a leading indicator as to whether auto-refills are creating oversupply.

Ensure your PBM is accounting for supply-on-hand when approving refills. The PBM decides whether an early refill is approved for payment by the benefit plan. The detailed logic that is used for those approvals matters. Many PBMs set a simple percentage threshold for each fill (i.e., 75% completion of the prior fill), and allow the dispensing pharmacy to refill as soon as that threshold is reached. This can lead to unchecked accumulation of excess supply over time. More advanced PBMs apply a “lookback” mechanism that accounts for a patient’s existing stockpile from prior fills. By adjusting the refill-too-soon threshold date based on actual medication possession data, these PBMs help cap excess supply – ensuring that patients have what they need without driving unnecessary cost or waste.

Consider an alternative PBM solution. PBMs with vertically integrated distribution or mail-order businesses benefit financially from over-supplying members with medication. If many of your members are consistently receiving more medications than they need, it’s an indicator that interests may be misaligned. Partners that are transparent about their revenue streams and enable access to real-time dispensing data can empower employers to manage over-dispensing when volume becomes an issue. Weigh your options and consider whether it may be time to switch PBM partners

Convenience shouldn’t come at the cost of control – or financial sustainability. Auto-refill programs may seem helpful on the surface, but beneath that simplicity lies a complex web of incentives that may not serve the employer’s best interests. It’s time to move beyond passive plan design and take a closer look at where your pharmacy dollars are going. By scrutinizing refill practices and aligning with partners who prioritize transparency and value, employers can protect both their budgets and their members.

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Source: https://www.benefitspro.com/2025/09/10/how-employers-can-take-back-control-of-unnecessary-pharmacy-spending/

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