Over the last few years awareness of specialty drug use and cost has become the focus of pharmacy benefit management. This is complicated by the fact that many of these drugs are paid under the medical benefits because they are often administered in a doctor’s office or other provider setting. The latest Specialty Drug Benefit Report from the Pharmacy Benefit Management Institute provides details on current trends. (PBMI Report) The report is based on survey data from 337 employers with at least 1000 covered persons. These specialty drugs represent the majority of the drug development pipeline and often are new treatments for the disease they target. They can be very beneficial, but they often cost tens of thousands of dollars for a course of treatment, so their use needs to be carefully managed. Accordingly, about 70% of employers say reducing inappropriate utilization is a top goal for managing specialty medications and 57% say reducing the cost is one. The top problems identified by these employers all relate to cost. In 2014, specialty drugs under both the medical and pharmacy benefits are expected to account for over 30% of total drug spending, growing to over 50% by 2018. The major strategies used by employers to manage utilization and spending continue to be prior authorization, used by 90% under the pharmacy benefit and 68% under the medical benefit; formulary restrictions, used by 85% under the pharmacy benefit and 44% for the medical benefit; and clinical care management programs, used by 82% on the pharmacy side and 55% on the medical side. Cost-sharing tends to be variable, with copayments used by 49% on the pharmacy benefit and 22% on the medical side, with an average of $50-60. Coinsurance is used by 17% on the pharmacy side and 41% for the medical benefit and coinsurance amounts average 20%. Use of specialty pharmacies is mandated by many employers. A significant cost trend is reported by most employers, but surprisingly around 14% of large employers aren’t aware of their trend. And many employers don’t have access to outcomes information. Hard to manage it if you don’t know it. What is certain is that the focus on specialty drug management will intensify and that patients will likely end up bearing even more of the costs.
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About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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