Third-party administrators (TPAs), employers and employees are increasingly concerned about the growing cost of specialty drugs. Relief, WellDyneRx believes, will come to those employers and TPAs that (1) encourage specific public policy changes and (2) partner with pharmacy benefit managers (PBMs) that own best-of-breed specialty pharmacies.
4. The best specialty pharmacies employ a multi-pronged approach to
managing costs, including:
Additionally, best-of-breed specialty pharmacies go beyond the core business of
dispensing medications to track key industry developments. They leverage such
developments to help TPAs and employers contain costs. Drug trends provide a
good example. While there were just four drugs that treated MS in 2004, today there
are 11 products, providing an opportunity to tier the medications by relative cost and
effectiveness.10
The best specialty pharmacies are consistently the first to leverage the
opportunity presented by MS and other maturing therapy classes to the benefit of TPAs
and self-funded businesses.
In conclusion, while the cost of traditional medications is expected to rise
modestly, today’s significant specialty drug spend is projected to rise dramatically.
A two-pronged approach – advocating policy changes and partnering with a PBM
that owns a best-of-breed specialty pharmacy – will enable TPAs and their employer
customers to manage and moderate their specialty medication spend.
Footnotes
1. “Specialty Drugs – Issues and Challenges,” Issue Brief, America’s Health Insurance Plans,
June 2014.
2. Ibid.
3. U.S. Food and Drug Administration, http://www.fda.gov/Drugs/ResourcesForYou/Consumers/
ucm143563.htm, March 15, 2012.
4. Silverman, Ed, “Tiger in the Fiscal Room: Beware the Increasing Cost and Number of
Orphan Drugs,” Managed Care, March 2013.
5. Lee, Jaimy, “New Drugs Carry Hefty Price Tags,” Modern Healthcare, Oct. 5, 2013.
6. Op. cit., Silverman.
7. National Health Expenditure Projections, 2012-2022, U.S. Department of Health and
Human Services, Centers for Medicare Medicaid Services, www.cms.gov.
8. Actuarial Value and Cost-Sharing Reductions Bulletin, U.S. Department of Health and
Human Services, spring 2012.
9. “Washington State: A Integrated Approach to Evidence-Based Drug Purchasing,” The
Commonwealth Fund, http://www.commonwealthfund.org/publications/newsletters/states-in-
action/2006/mar/march-2006/profiles--in-depth-looks-at-initiatives-that-are-making-a-difference/
washington-state--an-integrated-approach-to-evidence-based-drug-purchasing, March 29, 2006.
10. Multiple Sclerosis Association of America, http://www.mymsaa.org/about-ms/treatments/,
last updated Aug. 19, 2014.
Prior authorization
This can effectively help avoid inappropriate drug use and promote the use of evidence-based
drug therapy. The efficient and effective use of health care resources can minimize costs,
improve member access to more affordable medications and improve clinical outcomes.
Step edits
This therapy approach ensures the patient uses a lower-cost, equally efficacious drug before
authorizing a more complex and often more expensive medication.
Quantity level limits
Such limits include duration of therapy, quantity over a period of time and maximum daily dose
edits. Drug benefit coverage limits are based on FDA-approved durations and dosing.
Reporting
Effective specialty drug management is informed by timely information about utilization,
intervention, coordination and outcomes. TPAs and employers should partner with a specialty
pharmacy that provides comprehensive, in-depth reporting and access to all aspects of data.
Trend analysis
The best specialty pharmacies meet with TPAs and self-funded employers to review how their
plans are running and address opportunities for cost containment, improved utilization and
member education about medical conditions and drug therapies.