Previous articles have explored the clear trend toward a larger share of new drug approvals for specialty drugs over the past decade — which is not expected to change. Specialty costs are here to stay and will likely continue to grow.
Utilization appears to be the main driver. Previous years’ data reported 1-2% of the population utilizing specialty drugs. This increased to over 5% in 2021.*
With the anticipated pipeline growth, utilization will continue to climb as more members will use drugs for additional indications, as well as the new agents that will come to market.
Now more than ever, it’s important that specialty drug spend be managed. Below, are actions that may help mitigate the spend and trend.
Member advocacy/care management: One of the first steps should be to help educate plan members about their conditions and treatment. When members understand their disease treatment, they recognize the importance of adherence and compliance with therapy and are also better able to communicate side effects and treatment needs. Plan members using specialty drugs should also be offered care management to help navigate the complexity and costs associated with their treatment. While it might be an additional cost to employers, care management is a worthy investment when dealing with specialty.
Formulary and clinical management: Specialty drugs should be managed through clinical edits to ensure safe and appropriate utilization. One way this can be achieved is via formulary management (RX benefit only). Other clinical edits may include prior authorization requirements for medical necessity, quantity limits, and step therapy. If you currently are not fully engaged in clinical utilization management, it should be considered to implement.
Site of care management: The location at which medical specialty treatment is given can have significant cost impact. Outpatient hospital settings are typically 2-3 times more expensive than other sites of care. Studies have demonstrated that alternative settings such as physician’s offices, ambulatory infusion suites, and home infusion are safe and effective sites of care. These preferred sites also may enhance the member experience by offering increased convenience and amenities with decreased cost and exposure.
Contracting: Strong provider contracts can help reduce costs and will produce consistent pricing.
Rebates: Rebate potential should be leveraged to the fullest extent with your prescription benefit manager (PBM) or health plan. In looking at trend, it's also important to consider the decrease that your rebate dollars contribute. Incremental pharmacy rebates continue to bring value through formulary optimization.
Exclusive or narrow networks: This can be another very effective contracting strategy. Limiting your network to a smaller number of pharmacy providers typically results in lower contractual rates and improved clinical services.
Requiring members taking certain specialty drugs to fill prescriptions through a preferred specialty pharmacy ensures access to expert clinical support and helps manage member total health and total cost. This not only includes convenient delivery of medications, but members are engaged by a team of dedicated pharmacy representatives experienced in specialty drugs and complex, chronic conditions. The care team helps members stay on track with their medications and better manage their condition, promoting adherence and improving clinical outcomes.
Financial assistance programs: Specialty pharmacies should have dedicated teams to help enroll plan members in patient assistance programs. While this helps reduce member costs, they do not reduce the employer/plan portion of the claim. Pharmacy copay maximizer programs will also reduce employer portions by ensuring that a plan’s cost share strategy operates as intended by preventing non-needs-based manufacturer copay assistance funds from counting toward a member’s deductible and/or out-of-pocket maximum. By maximizing the amount drug manufacturers pay through copay assistance, members have a $0 out of pocket cost and plan sponsors pay less.
In summary, while reducing trend will always be a goal with specialty management, it's necessary to utilize a complete and balanced strategy. Successful results will likely not be achieved without clinical and cost saving components. We must also anticipate the future as the specialty landscape is dynamic and ever-changing.
* Source Artemetrx report: https://www.formularywatch.com/view/spending-on-specialty-drugs-maintains-double-digit-growth
