Editor’s note: This is the second of a two-part series about pharmacy plans.
Specialty pharmaceuticals are complex drugs that often require special storage, handling, administration and consistent patient monitoring. They are also a very expensive part of an employer’s pharmacy plan, with many drugs costing $600 per month and more.
Specialty drugs are typically used by 1 to 2 percent of a given population, yet account for 15 to 20 percent of total drug spending, and those numbers are growing, according to Steven Marciniak, director of pharmacy for Priority Health.
“As new drugs come to the market and existing drugs have expanding indications for use, some estimates are that, within five years, utilization will grow to 5 percent of the population and account for 25 to 33 percent of total drug spending,” Marciniak says.
Smart Business spoke with Marciniak about how to control the cost and utilization of specialty drugs while maintaining a high level of member care management.
For what types of diseases are specialty drugs needed?
The most common conditions treated with specialty drugs tend to be auto-immune diseases such as rheumatoid arthritis and multiple sclerosis, and various cancers. Human growth hormone deficiency, hepatitis C and hemophilia are other leading cost drivers.
What kind of management strategies can be used to control cost and utilization of specialty drugs while maintaining a high level of member care management?
One area to focus on is benefit design. Many specialty drug classes have multiple drugs with similar safety and efficacy profiles, creating opportunities for formulary positioning and associated rebate opportunities. Appropriate benefit design is necessary to drive utilization to preferred products.
Current predominant two-tier benefit designs do not allow pharmacy plans to take advantage of the changing marketplace. However, by using a three-tier plan with managed specialty benefit (five tiers total), you can leverage manufacturer pricing and influence member utilization to the cost-effective products.
You should also look at distribution channels. Partnering with a preferred specialty vendor often delivers the most aggressive pricing, as opposed to using multiple vendors, and also streamlines administrative efficiencies and creates a level of consistency in provider communications, formulary management and member care.
Most specialty drugs have prior authorization criteria in place that helps to ‘capture’ specialty drug requests. Occasionally, a specialty drug is approved only for limited distribution, typically to allow the FDA greater monitoring and oversight.
