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AIS's Health Business Daily
Featured Story Sept. 17, 2009
As Use of Specialty Pharmaceuticals Increases, Benefit Design Can Help to Control Costs Reprinted from SPECIALTY PHARMACY NEWS, a monthly newsletter designed to help health plans, PBMs, providers and employers manage costs more aggressively and deliver biotechs, infusibles and injectables more effectively. By Angela Maas, Managing Editor, As specialty drug use and costs continue to rise, appropriate benefit design — not just pushing a drug onto the fourth tier of a formulary — can help manage these therapies, says a recently released report from pharmacy benefit manager (PBM) Prime Therapeutics LLC.
According to its 2009 Drug Trend Insights, among Prime covered lives in 2008, specialty drugs represented 1.1% of all prescriptions filled — but they were 15.4% of the overall drug cost. The report notes that specialty drug categories represented eight of the top-10 therapeutic categories that experienced the fastest-growing costs in 2008.
David Lassen, vice president of clinical services and chief clinical officer at Prime, says the most significant finding of the study was that while per-member per-month costs for traditional nonspecialty medications fell 0.5% from 2007 to 2008, PMPM costs for specialty drugs increased 9.1%. “There is a unique inelasticity with specialty medications relative to what we saw in the traditional category,” he says. “This is interesting in light of the economy.”
Utilization of specialty drugs also increased 6.4% from 2007 to 2008, compared with a 0.1% decrease in overall utilization. According to Lassen, the overall utilization of traditional nonspecialty drugs has been decreasing for the last decade or two. But “clearly the use of these [specialty] medications went up despite for the first time” the book-of-business trend for traditional drugs was negative. Given the full specialty pipeline and new indications for already-approved therapies, “these medications will continue to be used, and their use will go up,” he says.
In fact, says Lassen, Prime believes that there is underuse of some specialty therapies. “We need to increase use and compliance” in some areas, he says. Oftentimes plans may manage specialty costs by placing all of these therapies on the fourth tier of a formulary and shifting the costs to members. But then members balk at paying the high costs, so their compliance suffers, which often means they end up in the hospital incurring medical expenses. The report says the PBM’s data show that many people with rheumatoid arthritis (RA) and psoriasis have been diagnosed but have not received treatment. Prime, which is owned by 11 Blues plans and serves five other plans, looked for qualified diagnoses of RA and psoriasis, which “potentially indicate the need for medication,” explains Lassen. “Then we look at how many are utilizing a biological agent.” Data for 2006-2007 — the latest figures available, although Prime is in the process of refreshing these data — show that “for every 1,000 people with a qualified diagnosis, only 270 were utilizing biological medications,” he tells SPN. They may have been on a nonspecialty therapy such as methotrexate, though. The lack of compliance could be due to benefit design and cost, contends Lassen. Prime, he says, advocates treating some specialty agents as formulary, some as nonformulary within a traditional benefit design structure, not simply shifting them all onto a fourth tier. “Benefit design should be appropriate to drive adherence and manage medical costs that could be incurred” because of noncompliance, he says.
According to the Prime report, specialty drug classes that have multiple therapies offer “an opportunity to establish a formulary and negotiate deeper discounts for preferred drugs.” Lassen says that growth hormones are a good example of such a class. Prime reviews medications quarterly so it can make recommendations to its national pharmacy and therapeutics committee, which then makes formulary recommendations to Prime’s Blues clients. Within the growth hormone class, the PBM “has identified that it is clinically appropriate to have preferred agents,” says Lassen, after establishing equal efficacy, safety and uniqueness. “This allows for business and financial discussions to take place,” he says. “We can drive growth hormone products through a traditional three-tier design.” He adds that “we will continue to see the strategy emerge across other categories in specialty.” Prime, he says, has made preferential formulary and nonformulary decisions within the RA/psoriasis class.
When managing specialty drugs, health plans should consider what the right member contribution is to manage total costs, says Lassen. Plans should be “making sure they cap out-of-pocket costs per month for many specialty prescriptions for members,” he says, although “this may not be a popular discussion.” And plans need to keep in mind that specialty drugs are not only impacting their pharmacy benefit. The spend under the medical benefit is a “significant portion of overall specialty drug costs,” so how it’s managed is important, he maintains. Plans have an opportunity now to prepare for discounts, appropriate benefit design and controls such as utilization management, he adds.
“As specialty drugs grow in cost and use, plans need to consider how to subsidize the costs of these therapies,” Lassen says. “For every dollar used in the pharmacy benefit, how is it used effectively overall? Plans need to understand a drug’s indications for use and the diagnosis and use of medication to really efficiently manage specialty therapies.”
View the 2009 Drug Trend Insights at www.primetherapeutics.com/pdf/2009PrimeDrugTrends.pdf. |
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