Tightly Managed Specialty Pharmacy Benefits Can Cut Specialty Drug Costs In Half

A study presented on March 7 at the National Business Group on Health’s (NBGH) Business Health Agenda 2013 conference in Washington, D.C., showed that, on average, employers that use multiple cost management programs had a 50 percent lower specialty drug trend than employers that did not use any specialty management programs. The study, conducted by pharmaceutical provider Express Scripts, examines the impact of multiple utilization management programs on the cost of specialty medications—a cost that is expected to account for $1 out of every $4 spent on prescription medications by 2014.

“Specialty drug costs and use have escalated without sufficient oversight to manage waste or misuse of these expensive medications. Add in the impact of bad health decisions and you get both poor financial and clinical outcomes,” said Glen Stettin, senior vice president of clinical, research and new solutions at Express Scripts. “This data clearly demonstrates that multiple progressive management solutions mitigate the rising cost of specialty therapies by identifying and seizing cost-saving opportunities, as well as enabling better decisions that can lead to improved health outcomes.”

Express Scripts researchers analyzed the specialty drug spending of 60 employer clients who are members of NBGH, representing more than 5 million Americans with pharmacy benefits. The employers were categorized into one of three groups based on the type of cost management programs adopted:

• Unmanaged—employers whose health plan members could obtain their specialty medications from any pharmacy and did not use any specialty utilization management programs.

• Somewhat managed—employers whose health plan members used a specialty pharmacy exclusively and one specialty utilization management program.

• Tightly managed—consisting of employers whose health plan members used a specialty pharmacy exclusively combined with multiple specialty utilization management programs.

Employers classified as unmanaged experienced an annual average increase in specialty drug spending per member per year of 27.8 percent. However, employers classified as tightly managed saw an annual increase in specialty drug spending per member per year of 13.6 percent, half that of the unmanaged group and nearly one-third lower than the average annual projected specialty drug trend. In addition, tightly managed programs saw higher average member adherence rates in top therapy classes such as multiple sclerosis and oncology.

Specialty medications require specialized management solutions. According to the study, the increase in spending on specialty drugs in 2012 was 18.4 percent, up slightly from 2011, which was 17.1 percent. Spending on traditional medications decreased for the first time to -1.5 percent, predominantly due to generics. Driving specialty medication trend in the top ten therapy classes was unit costs, up 18.7 percent, while utilization was -0.4 percent. Specialty medications for inflammatory conditions, multiple sclerosis, cancer and HIV accounted for nearly 70 percent of annual spending on specialty drugs. In addition, hepatitis C virus (HCV), while having a relatively low per-member-per-year cost of $7.82, is the highest trending therapeutic category at 28.9 percent and is expected to increase rapidly with new therapy regimens and screening guidelines being implemented.

Nearly 50 percent of specialty drug costs are billed on the medical side of the plan benefit, where it is difficult to apply the various pharmacy benefit solutions that can effectively drive down costs, Express Scripts noted.

For more information, visit http://www.express-scripts.com.

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