One of the most confusing attributes of specialty drugs is the fact that they may be covered under either the medical or drug benefit. Payers have been trying to rationalize how these divisions are made, with place of administration becoming a leading factor. In 2011, 82% of plans were covering self-administered drugs only under the drug benefit and 76% were covering office-administered agents only under the medical benefit. Both are significant increases from the prior year. Home health agency administered drugs are also increasingly covered as medical benefit drugs. Regardless of which benefit they are covered under, there is a strong trend for a uniform management program, applying the same rules across both benefits. The vast majority of plans now track both their specialty spending and cost trends for drugs under the medical and pharmacy benefits, up significantly from just a few years ago, when less than a third of plans tracked the medical benefit in particular.
In terms of cost-sharing, most commercial plans and almost all Part D plans use a single tier for specialty drugs. For commercial plans under the drug benefit, about a fourth use a copay, with an average of $120, and about three-fourths use coinsurance , with an average of 22% of the drug’s cost. In Part D, only 14% of plans use a copay, average of $66, and 86% use coinsurance, average of 31% of cost. The use of maximum-out-of-pockets is declining. For the medical benefit, over half of plans now apply a cost share, with most using coinsurance at an average of 20% of cost. Almost all health plans now require prior authorization for specialty drugs under both the medical and pharmacy benefit, and for almost all categories of specialty compounds. Prior authorization is used primarily to know who is getting prescribed and what for. Then the plan can decide if it is covered, but also manage use carefully to ensure that the drug is effective for the patient and can work with vendors to get the best price for the drug. We’ll finish on this major report tomorrow.