The cost of prescription drugs in the United States is out of control. In 2014, the average cost went up by 10.9 percent, and unfortunately, these increases don’t look like they will slow down anytime soon. Employers therefore must understand why prescriptions are so expensive so they can figure out how to help their employees manage such big costs.

The Reason Behind the Price Hikes

Prescription drug companies keep raising prices, in part because they need to offset the high costs of medical research and development (R&D). At the same time, drug companies are under pressure from their investors to increase their profit margins, and the easiest way to do this is through higher prices.

Doctors and pharmacists can also contribute to the problem because of the way they give advice for prescriptions. Most medical conditions have a few different prescription-drug options, and some — namely, generic drugs — are much less expensive than others. However, some doctors and pharmacists still prescribe expensive options even though there are more affordable choices available.

Finally, prices are high in the United States because the country takes on an outsized share of paying for pharmaceutical R&D. Other countries negotiate lower prices for prescription drugs, which means companies need to make that money back in the American market.

Ways to Manage Costs

Employers should review their prescription drug plan every year and work with their insurance company to make sure they have a plan that’s giving them the best value.

Employers should also encourage their employees to find ways to bring costs under control. For example, employees should always ask their doctors if lower-priced options are available for their treatment. Employers can also set up programs to reduce the use of more expensive specialty drugs. One year of specialty medications can cost over $75,000, so it’s important that this care is only used when it’s absolutely necessary.

One way to control specialty drug use is through a step treatment program, which requires that employees always start taking lower-cost drugs first. They can only move up to more expensive versions once the lower-cost drugs show they aren’t working. Another option is to add a utilization management program. This provides extra medical screenings to confirm that a more expensive specialty drug is actually needed before the prescription is filled.

Finally, employers can consider ending prescription drug benefits for their employees who are eligible for Medicare. These employees may qualify for extra government support for their prescriptions, so they’ll be able to afford forgoing work coverage, leaving more resources for the rest of your employees.

The cost of prescription drugs will continue to be an ongoing problem. However, by implementing these strategies, employers can better cope with this challenging environment.

David Rodeck is a professional freelance writer based out of Delaware. Before writing full-time, he worked as a health- and life-insurance agent. He specializes in making insurance, investing and financial planning understandable.