www.Medtipster.com Source: Navitus Clinical Journal, Vol. 9 – January 2013
Approximately one to five percent of the population uses specialty medications. Nonetheless, spending for specialty medications has increased between 15 and 20% for the last several years and is expected to represent up to 40% of an employer’s total medical spend by 2020. Controlling specialty medication cost is therefore a critical focus area for plan sponsors. With more and more specialty drugs coming down the pipeline, it will be increasingly important for plan sponsors to manage this area of their drug spend.
Managing this highly complex area involves coordination among multiple parties, including plan sponsor, pharmacy benefit manager (PBM), medical administrator, specialty pharmacy and the patient.
Benefits of Specialty Drug Control
Growth in specialty spending is expected to outpace non-specialty spending due to:
- High proportion of newly approved drugs in the specialty market
- Complex and expensive manufacturing processes
- Limited competition within specialty medication therapy classes
It is clear that plan sponsors can benefit from managing specialty costs. While specialty medications may represent a low percentage of the drugs purchased by the plan sponsor’s members, the cost of these medications represents much more than the actual percentage of medications purchased.
In addition to cost control, helping members adhere to their regimens with specialty medications is essential, as high adherence rates have been shown to reduce hospitalizations, promote better health outcomes and lower overall health care costs.
Ways to Manage Specialty Medications
1. Implement a Mandatory Program
We recommend that plan sponsors implement a SpecialtyRx program as mandatory for members with specialty needs. Specialty programs coordinate personalized support for patients impacted by chronic and complex diseases, such as rheumatoid arthritis, multiple sclerosis and cancer. Such diseases often require complicated medication regimens that include specialty medications. By mandating use of a specialty pharmacy vendor, plan sponsors reap the benefits of reduced drug discounts with specialty pharmacy partners (versus the typically higher retail pharmacy pricing), superior clinical oversight, and individual member case management
2. Incorporate a Split-Fill Program
A Specialty Split-Fill Program reduces days’ supply to 15-day intervals for qualifying high-cost specialty medications that typically have high discontinuation rates within the first three months of therapy. This prevents unnecessary dispensing of two weeks of therapy, should therapy be discontinued within the first half of the first three months of a prescription. This program also allows specialty pharmacy to initiate earlier clinical interventions due to medication side effects that require dose modification or therapy discontinuation. According to the May 2012 issue of Managed Care, a health plan with about 500,000 members saved approximately $300,000 in its first year with a split-fill program.
3. Know your Specialty Costs Through Pharmacy & Medical
Plan sponsors should equip themselves with information about their specialty drug spend and track specialty costs not only through their PBM but through their medical vendor as well. Less than 20% of health plans and employers currently receive reporting from their PBMs or other health care vendors on medical specialty utilization. Given that plan sponsors identified specialty drug costs as one of their two most important outcomes for specialty management, and that 50% or more of the specialty spend resides on the medical side, this gap represents a critical area of opportunity.
4. Managed Specialty Programs relieve clients of the burden of managing their specialty populations and assume this responsibility through a comprehensive, patient-centric program that offers:
- Built-in utilization management edits (e.g., prior authorization, step therapy) to ensure members use lower cost specialty products, where appropriate.
- Continually negotiated lower discounts with specialty pharmacies.
- Price increase protection built into rebate contracts for specialty drugs, where available, to account for price inflation; that is, when certain products increase in price, rebates for those products automatically increase as well.
- Continual monitoring of new drugs entering the pipeline. Their Pharmacy & Therapeutics Committee will continue to monitor and evaluate specialty drugs, including any biosimilars being released. Biosimilars are products that are chemically similar to other products; very few have received FDA approval at this point. We expect biosimilars will be significantly less expensive than their specialty brand medication alternatives and will play a bigger role in controlling specialty trend in the future.
As an example, a plan sponsor’s employee has a very expensive specialty medication. This specialty drug utilization represents less than 2% of total utilization, but accounts for, on average, half of the plan sponosor’s drug spend. The previous discount for the drug was under 20% off the average wholesale price. After its transition to a managed specialty program, the discount for this drug rose to 47% off the average wholesale price, providing a savings of more than $140,000 in the first three quarters.
How to Begin to Control Specialty
If you do not currently use a mandatory program, talk to your provider today to implement the program. Plan sponsors can reap the benefits of preferred pricing via a specialty pharmacy, and their members can benefit from the one-on-one specialized care from the case managers available through specialty pharmacy vendors.
Be proactive and take control of this sector of your plan’s drug spend. By maintaining a tightly managed specialty program, not only will plan sponsors benefit from reduced costs, but their members will also benefit from improved overall health.