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5 Tips to Managing Your Insurance Coverage

March 26, 2013 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

Don’t use providers that aren’t in your network. Most plans have lowered how much they will pay for doctors or facilities not in your network, while some won’t pay for out-of-network providers at all.

Review how prescriptions are reimbursed under your coverage. Many plans are now offering reimbursement based on a percentage of the retail cost of a drug, which can add up quickly. If you pay a percentage instead of a co-pay, compare prices at different pharmacies.

Prepare for a doctor visit ahead of time if you anticipate a prescription, diagnosis or treatment plan. You should have your benefits summary with you as well as your drug formulary to know how much you’ll pay for a prescription before you leave the office. You can also pull up prices at local facilities on your tablet or phone at www.medtipster.com to discuss choices with your doctor.

Read your benefits summary carefully to know what’s in your plan, and what isn’t.

Shop for the lowest priced facility for diagnostic tests. Hospital-based services are often priced higher than independent facilities.

 

Specialty Drug Trend of 18.4% Dwarfs Traditional Drug Trend of -1.5%

March 11, 2013 By: Nadia Category: HealthCare, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Drug Channels, 3/6/2013

Express Scripts just released the latest iteration of its long-running Drug Trend Report. This year’s report includes both Express Scripts and legacy-Medco covered lives, so it’s the most comprehensive look at pricing and utilization.

Study findings

  • Specialty drug trend of 18.4% dominated traditional drug trend of -1.5%.
  • Drug trend for traditional drugs fell to a record-low -1.5%, due largely to the growing substitution of less-expensive generic drugs.
    • Utilization increased by 0.6%, but costs decreased by 2.2%.
  • Drug trend for specialty drugs was 18.4%, consistent with its high growth rate over the past six years.
    • Utilization decreased by 0.4%, while costs increased by 18.7%.
  • Specialty spending is concentrated in a few conditions. For traditional drugs, treatments for the top three conditions of diabetes, high blood cholesterol, and high blood pressure–accounted for 30% of total per-member, per year (PMPY) spend.
  • For specialty drugs, treatments for the top three conditions–inflammatory conditions, multiple sclerosis, and cancer–accounted for 58% of total PMPY spend.
  • Trend reflects two primary components
    • Change in Utilization (the total quantity of drugs obtained by plan members)–Utilization varies with changes in the number of plan members on drug therapy, the degree to which plan members are adherent to their drug therapy, and a change in the average number of days of treatment.
    • Change in Unit Costs–Unit costs vary with:
      • 1) the rate of inflation in brand-name drugs prices,
      • 2) shifts to different drug options within a therapeutic class,
      • 3) a shift in mix of therapeutic classes utilized by plan members, or
      • 4) the substitution of generic drugs for brand-name drugs.

 

The Importance Of Specialty Medication Management

January 03, 2013 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

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:

  1. High proportion of newly approved drugs in the specialty market
  2. Complex and expensive manufacturing processes
  3. 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.

Drug Prices Up 3.5% For 2012

December 04, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: www.express-scripts.com, 11.28.12

According to the Express Scripts Prescription Price Index, prices on a market basket of the most highly utilized brand-name medications increased 13.3 percent from September 2011 to September 2012, far outpacing the overall economic inflation level of 2.0 percent. During the same timeframe, prices of generic medications declined 21.9 percent. This 35.2 percentage point net inflationary effect is the largest widening of brand and generic prices since Express Scripts began calculating its Prescription Price Index in 2008.

“The patent cliff has fueled a growing price disparity between brand-name and generic medications,” said Steve Miller, M.D., chief medical officer at Express Scripts. “The trend emphasizes the nation’s continued need for the tools we employ to help patients make better decisions, including generic use when appropriate.”

Drivers of Traditional Drug Trend

During the first three quarters of 2012, spending on traditional medications decreased 0.6 percent over the same period in 2011, primarily driven by lower prices brought on by increased use of generic medications.

The top traditional therapy class is mental and neurological disorders (including antidepressants), which now consumes 24.7 percent of all traditional drug spend. Although use of these medications has increased 3.1 percent compared to the first three quarters of 2011, total spending in this class is down 1.9 percent due to newly available generic antidepressants and antipsychotics.

Total spending on medications to treat high blood pressure and high cholesterol decreased 7.7 percent, primarily driven by the continued impact of patent expirations for blockbuster drugs.

Drivers of Specialty Drug Trend

Specialty drug trend continues its year-over-year double-digit growth. During the first three quarters of 2012, spending on specialty medications increased 22.6 percent over the same period in 2011, primarily driven by unit cost increases. In the first nine months of 2012, specialty drug costs consumed 20.8 percent of total pharmacy spend.

“The continued rise in spend on specialty medications underscores the nation’s need to accelerate the pathway for biosimilars,” Dr. Miller said. “Additional competition within these therapy classes would provide a necessary market control against price inflation.”

The three therapy classes representing the largest amount of specialty drug spend continue to be rheumatoid arthritis/autoimmune conditions, multiple sclerosis and cancer.

Medications commonly used to treat hepatitis C continue to have the largest specialty spend increase, 117.3 percent over the same period in 2011. Increased utilization is driving this trend, as new patients begin and continue treatment with one of two new medications.

Eight of the nine notable new medications approved in the third quarter are specialty medications. Many of these medications are second-line and third-line drugs indicated to treat advanced cancers.

Spotlight on Obesity Medications

The report reviews the two new anti-obesity medications approved this summer by the U.S. Food and Drug Administration. In clinical trials, many patients taking either of the new medications lost at least 5 percent of their body weight.

“The potential benefits of these new anti-obesity medications need to be compared against their risks and cost,” Dr. Miller said. “We are cautiously optimistic about the possibilities of these and other drugs like them, provided that they are prescribed appropriately and integrated with other lifestyle modifying programs that help patients make healthier choices that maintain their weight over time.”

Flu Season’s Approaching So Roll Up Your Sleeve

September 28, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News

www.Medtipster.com Source: HealthDay, 9.27/12 – By Steven Reinberg

 The only thing predictable about the flu is its unpredictability, U.S. health officials said Thursday, as they urged virtually all Americans to get vaccinated for the coming season.

Even though last year’s flu season was one of the mildest on record, that’s no sign of what this season will bring. It was only two years ago, officials noted, that the H1N1 pandemic flu swept around the world, sickening millions.

“The last several years have demonstrated that influenza is predictably unpredictable,” Dr. Howard Koh, assistant secretary for health at the U.S. Department of Health and Human Services, said during a morning news conference.

“Even mild seasons can lead to suffering and death,” Koh added. “Sadly, last year there were some 34 influenza-associated pediatric deaths.”

Every year an estimated 5 percent to 20 percent of Americans come down with the flu, leading to 200,000 hospitalizations — including 20,000 children under age 5, Koh said. And over a 30-year span, from 1976 to 2006, estimates of flu-related annual deaths ranged from a low of about 3,000 to a high of about 49,000.

This year’s vaccine contains the same strains as last year’s, plus two new strains — one for a new influenza A virus and another for a new influenza B, Dr. Daniel Jernigan, deputy director of the U.S. Centers for Disease Control and Prevention’s Influenza Division, said at the news conference.

“More than 85 million doses of flu vaccine have already been distributed and more is on the way,” he said, adding that about 170 million doses are expected to be available.

“The best time to get vaccinated is before the flu season gets started,” Jernigan said. “Everyone 6 months and older is encouraged to get vaccinated.”

The typical flu season runs from the fall through early spring.

Koh stressed the vaccine is safe and has only mild side effects. Because the flu is different each year, the vaccine needs to be revised to keep up with the circulating strains.

Despite the low level of flu activity in 2011-2012, about 42 percent of Americans got vaccinated, which is about the same as for the previous flu season, according to CDC records.

Among children, some 52 percent were vaccinated last year, compared with 51 percent the year before, Koh said. Vaccination rates typically drop as children get older, he noted.

For children 6 to 23 months old, almost 75 percent were vaccinated during the 2011-2012 flu season, compared to just 35 percent of teens, Koh said. “We were pleased that, for kids, for the second year in a row there were no racial or ethnic disparities in coverage,” he said.

But when it comes to adults, “there is much room for improvement,” Koh said. “Last year about 39 percent of adults were vaccinated, compared to some 41 percent the year before,” he said.

Vaccination is important for all adults, but particularly for those with conditions such as asthma, diabetes and heart disease, which can leave them susceptible to complications from flu, Koh said. “Coverage among these high-risk adults was only 45 percent last season, compared to 47 percent the season before,” he said.

While there were no racial or ethnic disparities in vaccination rates among children, disparities remained among adults, he said. Whites, American Indians and Alaska Natives had the highest vaccination rates at 42 percent, while Hispanics had the lowest rate at 29 percent, he said.

On the plus side, more pregnant women are getting vaccinated, Koh said, noting that pregnant women are at greater risk of complications from the flu. What’s more, a mother’s immunity can protect her newborn for the six months before the child is old enough to be vaccinated.

Koh also reported that last year 67 percent of health-care personnel were vaccinated, but there were major differences among workers in this group. For example, 87 percent of doctors working in hospitals were vaccinated. But in nursing homes, other than doctors and nurses, the vaccine coverage rate was 50 percent. “This is worrisome because these people care for people at high risk for complications from flu,” he said.

Getting vaccinated is the best protection from the flu, Koh said. Everyone 6 months and older should get a flu shot every year. Last season’s vaccination campaign prevented almost 5 million cases of the flu, 2 million doctor’s visits and 40,000 hospitalizations, according to CDC estimates.

More information

To learn more about the flu, visit the U.S. Centers for Disease Control and Prevention.

SOURCES: Sept. 27, 2012, news conference with Howard K. Koh, M.D., M.P.H., assistant secretary for health, U.S. Department of Health and Human Services; Daniel Jernigan, M.D., M.P.H., deputy director, Influenza Division, U.S. Centers for Disease Control and Prevention

Drug Adherence Rises When Co-Pays Go Down

September 14, 2012 By: Nadia Category: HealthCare, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Reuters Health, by Amy Norton – 9.11.2012

When people with chronic health conditions have lower out-of-pocket costs for medications, they are more likely to actually fill their prescriptions, according to a new research review.

The findings, reported in the Annals of Internal Medicine, sound logical. But they lend some hard numbers to the idea that lower drug costs should improve people’s adherence to their medication regimens.

“It was striking to us,” said lead researcher Meera Viswanathan, of RTI International, a Durham, North Carolina-based research institute.

“If you help people with costs, even a little, it seems to improve adherence,” Viswanathan said in an interview.

She and her colleagues reviewed several dozen U.S. studies on various efforts to improve people’s ability to stick with their prescriptions. A few of those studies focused on insurance coverage – either giving people drug coverage or lowering their out-of-pocket costs for prescriptions.

Some looked at what happened after Medicare prescription coverage took effect in 2006; others looked at cutting out-of-pocket payments for people with private insurance.

Overall, better coverage seemed to help. In a study of nearly 6,000 heart attack patients, for example, those given full drug coverage through their insurer got more prescriptions filled over about a year.

Of patients who were on their usual insurance, 36 percent to 49 percent filled their prescriptions, depending on the medication. Those rates were four to six percentage points higher among people with full drug coverage.

Patients with full coverage also suffered a new complication, like a stroke or second heart attack, at a slightly lower rate: 11 percent, versus just under 13 percent.

But while there is some evidence of actual health benefits, not many studies have followed people long-term to see if the better drug adherence translates into a longer or healthier life.

“There were some encouraging findings,” Viswanathan said. But more research is needed to know what the long-term health effects are, she and her colleagues write.

The results do not mean that better drug coverage is the only way to get people to fill their prescriptions, according to Viswanathan.

The studies in the review found some other tactics to work, too. Education plus “behavioral support” was one.

That goes beyond telling patients about their health problem, and why a particular medication is needed, Viswanathan said. “You would also try to get through the barriers that may keep a patient from taking it,” she said.

If a patient was afraid of side effects, for example, a nurse might discuss that with him or her.

Another measure that seemed effective was “case management.” That means the health provider would try to identify patients at high risk of not using their prescriptions, then follow-up with them – with phone calls, for instance.

It’s not clear, Viswanathan said, how programs like that could be “scaled up” to be widely used in everyday practice, and not just clinical trials.

And the specific fixes might differ depending on the health problem. With high blood pressure, a fairly simple move seemed to boost patients’ adherence to their medication: Giving prescriptions in blister packs rather than bottles, so people could more easily keep track of whether they’d taken their daily dose.

With more complex measures, the question of how to work them into the real world remains. “We need to know, what does it take to implement them into clinical practice?” Viswanathan said.

Figuring out how to get people to stick with their medications is considered a key part of improving healthcare. Studies show that 20 percent to 30 percent of prescriptions are never filled, and half of medications people take for chronic ills are not taken correctly.

All of that is thought to contribute to 125,000 deaths a year, and to cost the U.S. healthcare system as much as $289 billion annually.

Michigan Based Retail Pharmacy, Meijer, Offers Generic Cholesterol Reducing Prescription Drug, Lipitor, For Free

September 04, 2012 By: Nadia Category: Cholesterol, Free Prescriptions, HealthCare, Medtipster, Prescription News, Prescription Savings

www.Medtipster.com Source: Drugstore News, 9.4.12 – By Alaric Dearment

In what could symbolize the so-called “patent cliff” that an executive from healthcare market research firm IMS Health spoke of at a recent trade show, a regional mass merchandise chain is taking what used to be the world’s top-selling drug and giving it away for free.

Meijer announced Tuesday that it would offer generic versions of Pfizer’s cholesterol drug Lipitor (atorvastatin calcium) for free at all of its 199 pharmacies, saying it would be the first retailer in the Midwest to offer such a program. The program is the fourth free-drug program offered by the retailer over the last six years.

“We’re pleased to announce that our customers will now be able to fill their generic cholesterol-lowering atorvastatin calcium prescriptions for free in all of our pharmacies,” co-chairman Hank Meijer said. “In keeping with our commitment to provide low-cost solutions for the families we serve, the free cholesterol-lowering medication program is another way to help the customers who rely on our pharmacies.”

Before it lost patent protection, in November 2011, Lipitor had sales exceeding $7 billion per year in the United States. Ranbaxy Labs was the first to launch a generic version when the drug’s patents expired, and Ranbaxy’s own market-exclusivity period expired in May of this year. At the National Association of Chain Drug Stores’ Pharmacy and Technology Conference last month, IMS VP industry relations Doug Long said during a presentation that “We’re in the teeth of the patent cliff,” which refers to a period taking place over the next few years when a wave of expirations of several top-selling drugs’ patents will occur, eventually leaving many therapeutic indications such as cholesterol heavily commoditized and dominated by multiple generics.

“This initiative will have a huge impact because the cost of pharmaceuticals is frequently a barrier to getting appropriate treatment,” West Michigan Heart cardiologist and Spectrum Health Meijer Heart Center Cardiac Catheterization Labs director David Wohns said. “The biggest way to reduce the risk of heart disease comes from treating cholesterol. To have that drug available for free has the ability to impact countless lives.”

Skin Cancer Awareness Month

May 23, 2012 By: Nadia Category: HealthCare, Medtipster

www.Medtipster.com Source: PartnersRx – 5.23.12

Do you know that 59,695 U.S. adults were diagnosed with melanoma, and 8,623 died from the disease in 2008 (the most recent year for which data is available)?

May is Skin Cancer Awareness month and, with summer right around the corner, the ideal time to increase awareness of the importance of the prevention, early detection, and treatment of skin cancer.

Click here to receive “Are You Protected From The Sun?” written by the PartnersRx Clinical staff for even more information on how you can prevent skin cancer.

Specialty Drug Management, Spending and Trend Explored

May 14, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News

www.Medtipster.com Source: Ha T. Tu, Divya R. Samuel, Health System Change, April 2012

Spending on specialty drugs — typically high-cost biologic medications to treat complex medical conditions — is growing at a high rate and represents an increasing share of U.S. pharmaceutical spending and overall health spending.

Absence of generic substitutes, or even brand-name therapeutic equivalents in many cases, gives drug manufacturers near-monopoly pricing power and makes conventional tools of benefit design and utilization management less effective, according to a new qualitative study from the Center for Studying Health System Change (HSC).

Despite the dearth of substitutes, cost pressures have prompted some employers to increase patient cost sharing for specialty drugs. Some believe this is counter-productive, since it can expose patients to large financial obligations and may reduce patient adherence, which in turn may lead to higher costs.

Utilization management has focused on prior authorization and quantity limits, rather than step-therapy approaches — where lower-cost options must first be tried — that are prevalent with conventional drugs.

Unlike conventional drugs, a substantial share of specialty drugs — typically clinician-administered drugs — are covered under the medical benefit rather than the pharmacy benefit.

The challenges of such coverage — high drug markups by physicians, less utilization data, less control for health plans and employers — have led to attempts to integrate medical and pharmacy benefits, but such efforts are still in early development.

Health plans are experimenting with a range of innovations to control spending, but the most meaningful, wide-ranging innovations may not be feasible until substitutes, such as biosimilars, become widely available, which for many specialty drugs will not occur for many years.

High and Rising Specialty Drug Spending

Specialty drugs — typically high-cost biologic medications used to treat a variety of serious, complex conditions ranging from cancer to rheumatoid arthritis to blood disorders — are an increasing concern for employers and other purchasers.

  • While specialty drugs are prescribed for only one in every 100 commercial health plan enrollees, these drugs account for an estimated 12% to 16% of commercial prescription drug spending today.
  • The monthly spending per patient for a specialty drug typically exceeds $1,200.

Spending on specialty drugs is expected to rise dramatically as drugs currently in development come to market during the next decade and beyond.

Benefit Design Strategies

Mainstream commercial insurance products rarely exclude specialty drugs from their formularies. Once a new specialty drug receives approval from the Food and Drug Administration (FDA) and the health plan’s pharmacy and therapeutics (P&T) committee, its addition to the formulary is typically assured. P&T committee review typically focuses on ensuring safe and appropriate use and preventing off-label use, rather than restricting access to specialty drugs. The rare exceptions to this pattern of comprehensive formulary inclusion are found in the few specialty drug classes where many close substitutes exist — for example, growth hormone — and some niche insurance products aimed at individual and small-group purchasers that provide limited benefits to achieve much lower premiums.

Four-tier pharmacy benefit design. For specialty drugs covered under the pharmacy benefit, some employers choose to transfer a portion of the high costs to patients by adding another, higher cost-sharing tier to the standard three-tier pharmacy benefit design. While it is hard to generalize about the multitude of four-tier designs, the practice of transitioning from flat-dollar copayments in the lowest three tiers to coinsurance, where the patient pays a percentage of the total drug cost, in the fourth tier is quite common.

  • A typical design might require a generic copayment of $15,
  • a preferred brand copayment of $30,
  • a nonpreferred-brand copayment of $60, and
  • specialty drug coinsurance in the range of 10% to 25 percent.

Within the fourth tier, some employers — especially large employers — retain a degree of financial protection for patients by applying out-of-pocket maximums per prescription fill — for example, $100 to $250 — or per year — perhaps, $5,000.

Pricing

Obtaining lowest unit price. For specialty drugs covered under the pharmacy benefit, health plans take different approaches to obtain discounted prices from specialty drug manufacturers. It is common for smaller health plans to turn to one of the major PBMs — which all have acquired or developed their own specialty pharmacy divisions — to negotiate unit prices on their behalf, since the largest PBMs are best able to leverage their high volumes to obtain the steepest discounts from manufacturers.

Health plans with high volumes overall — such as the major national plans — or large regional market shares — such as some Blue Cross Blue Shield plans — often find it more advantageous to negotiate prices with manufacturers directly rather than relying on a PBM. Whatever their approach to price negotiations, when it comes to the distribution of specialty drugs to patients, most health plans contract with specialty pharmacies, since these entities have expertise on such matters as special drug handling and patient education.

Some specialty drugs are eligible for rebates on top of the discounted prices. These rebates are typically negotiated by whichever entity — PBM or health plan — is responsible for setting up the formulary and are paid to that entity after the drug has been purchased. Manufacturers are much more likely to offer rebates in drug classes where substitutes are available — for example, rheumatoid arthritis, multiple sclerosis and growth hormone deficiency. The size of rebates typically depends on the PBM or health plan’s willingness to grant the drug preferred-product status and place it in lower cost-sharing tiers.

Utilization and Care Management

Utilization management. Specialty drugs covered under the pharmacy benefit are subject to more pervasive and stringent utilization management (UM) than those under the medical benefit. Prior authorization, for example, is widely practiced — “nearly universal,” according to one respondent — under the pharmacy benefit but far less prevalent under the medical benefit, where retrospective review remains more common. One benefits consultant estimated that specialty drugs under the medical benefit are subject to prior authorization only about 5% of the time.

A major reason is that most contracts between health plans and providers contain no provisions for prior authorization or other UM protocols for specialty drugs under the medical benefit. Health plans are concerned that pushing to add a prior-authorization provision will result in provider resistance and perhaps provider exit from health plan networks. As with provider payment methods discussed previously, respondents suggested that implementing prior authorization under the medical benefit appears to be easier for regional Blue Cross Blue Shield plans whose large market shares give them leverage over providers.

Care management. Experts viewed strong clinical care management as critical to promoting both good health outcomes and cost containment. Key challenges include very sick patients with complex chronic conditions requiring complicated drug regimens, the need to adjust drugs or fine-tune dosage, and strong side effects leading patients to abandon drug regimens. Experts cited cancer and hepatitis C as examples where medications caused such unpleasant, sustained side effects that keeping patients compliant over time was particularly difficult. Several respondents emphasized the importance of a “high-touch” approach to care management, where staff not only has clinical expertise but also the ability to “form personal connections with patients” and motivate them to adhere to demanding drug regimens.

Key Takeaways

Among the common themes that emerged from interviews with industry experts, the following stand out:

Key drug management strategies that have proven effective for conventional drugs often are less applicable to specialty drugs: The lack of close substitutes for most specialty drugs greatly reduces, or eliminates altogether, the ability of tools like cost-sharing tiers and step therapy to steer patients and providers to cost-effective alternatives. It also sharply limits incentives for drug manufacturers to offer substantial price concessions. In contrast, other tools, such as prior authorization and quantity limits — which can help curb unnecessary or inappropriate use, improve patient safety, and reduce waste — are emphasized more in the management of specialty drugs.

Biosimilars are expected to lead to key breakthroughs in specialty drug management, but their impact won’t be seen for many years: The introduction of generic substitutes should allow payers to broaden the use of preferred drug tiers and step therapy, thereby exerting downward pressure on prices. However, achieving therapeutic equivalence — for biosimilar manufacturers — and assessing therapeutic equivalence — for regulators — are likely to be difficult, given the complex nature of biologics. Also, the expensive manufacturing process means that biosimilars may not yield savings as sizable as those achieved by conventional generic drugs. And, it will be an uncertain number of years before biosimilars can make an impact on competition and cost, because (1) innovator products are granted 12 years of market exclusivity and often are protected by patents lasting years beyond that; and (2) the FDA approval process — which has yet to be finalized — is expected to be rigorous and lengthy.

Integration of medical and pharmacy benefits is a goal worth pursuing, but how to achieve it isn’t clear: Efforts to overhaul the currently fragmented benefit structure — which can misalign incentives for patients and providers and result in uncoordinated patient management — are in the early stages of development, and results are uneven at best. Equalizing patient cost sharing for specialty drugs regardless of whether they are covered under the pharmacy or medical benefit is probably the most straightforward dimension of integration. Other aspects of integration present tougher challenges. The ability to track utilization and spending under the medical benefit remains limited, which in turn hinders the ability to manage a large segment of specialty drug utilization. Real-time integration of utilization data remains hampered by limitations in claims and billing systems. Also, as office-administered drugs are moved out of the medical benefit’s buy-and-bill approach, health plans will have to deal with fallout from physicians who see both their margins and clinical autonomy eroding.

Patient adherence is critical to good health outcomes: As one pharmacy consultant observed, “Price tags and performance guarantees [from PBMs] are one thing, but if you [can’t achieve] compliance, it’s all a waste.” Both financial factors — high out-of-pocket costs — and nonfinancial factors — strong side effects — pose formidable barriers to patient adherence and positive health outcomes. A combination of non-punitive cost sharing and strong care management may reduce these barriers. One benefit design approach that can help make financial burden more manageable is an income-based cost-sharing structure.

Employers should ensure that their specialty drug strategies are aligned with their overall benefits and business strategies: Decisions on specialty drug coverage require tough trade-offs between cost and access. Which cost-access combination an employer chooses will be heavily influenced by competitive conditions in the industry and the geographic and labor markets where an employer operates. Short-term cost containment can have unintended consequences — for example, increased cost sharing leading to reduced adherence to drug regimen, in turn leading to high-cost complications. Such negative impacts come more into play for employers with low worker turnover and those still offering comprehensive retiree health benefits, as these are the employers likely to be paying the bill in the long term for patients currently taking specialty drugs. Cost-benefit comparisons of different drug coverage options will be more accurate if they are able to account for impact on employee productivity — which is hard to measure — as well as direct medical costs.

PBMs’ interests may not align with employers’ interests: Some employers may be relying heavily on their PBMs to set specialty drug policies, determine specialty drug lists, and pass through discounts from manufacturers, without independently verifying whether their own needs are best served in these arrangements. Employers need to recognize that PBMs’ interests can diverge sharply from their own interests, as PBMs don’t have the same incentives as employers to limit the volume and the prices of drugs. Because the specialty drug sector is complex and the vast majority of employers lack the in-house expertise to deal with PBMs on an equal footing, many employers likely would benefit from having independent experts assess their PBM contract terms and audit compliance with those terms.

Employers Grapple With Birth Control Mandate

May 09, 2012 By: Nadia Category: HealthCare, Medicine Advice, Medtipster, Prescription News

www.Medtipster.com Source: Employee Benefit News, 5/1/12 – By, Lisa V. Gillespie

Federal contraception coverage mandate raises ire among insurers, may raise premiums for health plan members

The intersection between religion and business is a heated one, with the most recent flare-up sparked by a provision in the Patient Protection and Affordable Care Act that mandates employers cover the cost of contraception in their health plans. Although the Obama administration exempted houses of worship from the rule, it still requires coverage be made available to employees of religiously affiliated organizations such as hospitals and universities.

The administration has said insurers should ultimately make up any initial costs by avoiding expenses associated with unintended pregnancies. But a survey of 15 large health plans shows they are dubious of such savings.

Asked what impact the requirement will have on their costs in the year to two years after it goes into effect, 40% of insurers said they expect the requirement will increase costs through higher pharmacy expenses.

The survey of pharmacy directors at the health plans was conducted by Reimbursement Intelligence, which advises pharmaceutical, medical device and other companies on reimbursement issues. The firm did not name the insurance plans it surveyed.

Of the health plans, 20% said costs would even out because they already budget for contraception in the premium, 6.7% said it would drive up pharmacy costs but decrease medical costs, while 33.3% weren’t sure. None said it would lead to net savings.

“[Insurers] think it will raise pharmacy costs and won’t lower medical costs,” says Rhonda Greenapple, chief executive officer of Reimbursement Intelligence. “The idea that preventive care is going to reduce overall health care costs, they don’t buy it.”

In addition to health insurance companies, lawmakers also have questioned the precedent set by Obama’s plan that would force insurers to pay for coverage with no clear way of recouping the expense. “The idea that insurance companies are going to provide free coverage for items contained in the administration’s order reflects a misunderstanding of the business of insurance,” says Rep. Dan Lungren (R-Calif.). “Under its ‘accommodation,’ the religious employer continues to pay premiums that contribute to the revenues of the insurers. The money paid by religious employers for what will inevitably be higher premiums thereby frees up insurer funds to pay for abortion-inducing drugs, sterilization and contraception in violation of their strongly held beliefs.”

The guidelines require insurers to do away with copayments on coverage of preventive care services for women in all new plans beginning in August. A poll from the Kaiser Family Foundation in February showed nearly two-thirds of Americans favor the policy requiring birth control coverage for female employees, including clear majorities of Roman Catholic, Protestant evangelical and independent voters. Sixty-three percent of Americans overall supported it, according to the data.

But Catholic leaders, Protestant evangelical groups, Republicans and other social conservatives rejected the compromise, saying it still violates religious freedom under the U.S. Constitution and would cause economic hardship for self-insured institutions. The controversy has spawned a rancorous debate in Congress as well as a handful of Catholic lawsuits, including a federal suit in Nebraska joined by seven U.S. states.

Employer response

Some employers have voiced support for the rule, including one reader of EBN’s blog Employee Benefit Views, who said his/her employee population consists mainly of lower-income employees “who make $10 to $15 an hour who may not use birth control – not because of religious reasons, but because they cannot afford the cost of the birth control and keep a roof over their heads. I work for a self-funded employer, and this would create additional costs for us. However, these could possibly be off-set with the savings from births, disability leaves and the like.”

That cost savings may be attractive to employers constantly looking to reduce health care cost burdens. “I understand the issue of ‘religious freedom’ here, but just because this coverage is offered by your insurance company, does not mean that you have to use it,” wrote another EBV commenter. “I would think that each adult can make their own choice on whether or not this is a benefit [they] want to use. But the coverage is there, then, for those individuals who want and need that coverage. Better than the alternative of unwanted pregnancies, abortions and the like.”

Other readers likened the coverage of contraception to coverage to treat chronic conditions. “I do understand the perspective of the employer not wanting to pay for a benefit they do not condone,” a third EBV commenter wrote. “I don’t condone many of the activities that lead to diabetes or heart disease. But I still have to pay for the people that have those habits.”

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