The second part of our series on pharmaceutical reports deals with the specialty arena, the fastest growing and most expensive category of drugs, which has special difficulty for payers because some of these are in the drug benefit and some, such as office-administered agents or infused drugs, are under the medical benefit. The first report is issued by ICore, a specialty drug management company which is part of Magellan. The report focuses on injectables and oncology. Oncology is the fastest growing and largest specialty drug area. The report is partly a survey of payers to identify specialty management strategies and partly a review from claims data. Some key findings from the report are that almost all payers use at least one management strategy in regard to injectables and about half of plans receive rebates on an injectable drug, with rheumatoid arthritis drugs being the most common category. Over two-thirds of plan members have a coinsurance for these drugs, which averages about 17% of cost. Half of the members also have a copay. For certain classes of drugs, a large percentage of payers are requiring genetic testing before prescribing. Cancer injectables are half of all medical benefit injectable cost, and another quarter is for autoimmune diseases like arthritis. Injectable drugs are often used for a non-FDA approved diagnosis. We can anticipate that payers will continue to shift a higher percent of these costs to consumers, but there is also significant room for plans to improve their negotiations with manufacturers and receive better rebates and other discounts. (ICore Report)
The next report also focuses on specialty drugs and comes from EMD Serono, which issued the 7th edition of its Specialty Digest, which has an amazing amount of detailed information on managed care activities in regard to specialty drugs, broken down not just by drug category and type of management strategy, but also by product line–commercial, Medicare and Medicaid. The report also looks at drugs covered under the pharmacy and medical benefit and compares strategies used on each and the trend toward integrating management of specialty drugs regardless of which benefit they are covered under. The report finds that while there are many specialty drug providers, payers tend not to rely on them to manage cost and utilization, but use internal resources or independent vendors. This report also finds that use of molecular diagnostics is increasing. Payers have improved their ability to identify medical benefit specialty drug use from their claims systems and use several strategies to manage that use and cost, including prior authorization, step therapy, mandating use of certain suppliers, controlling provider reimbursement and increasing consumer cost-shares.