Steps for Managing High-Cost Specialty Drugs

Study finds a 19 percent increase in specialty-drug spending in 2012

By Stephen Miller, CEBS October 16, 2013

Spending on high-cost specialty drugs used to treat complex diseases such as cancer jumped by more than 19 percent in 2012 among members of pharmacy benefit manager (PBM) Prime Therapeutics LLC. In contrast, Prime experienced a 0.9 percent drop in traditional (all nonspecialty) drug spending last year.

A new report by the PBM, Specialty: Today & Tomorrow, highlights specialty-drug costs over the past year and recommends strategies to manage their steady rise.

“With the rising use of specialty drugs, the days of 1 to 2 percent increases in annual drug spending are nearing an end,” said Peter Wickersham, Prime’s senior vice president of cost of care. “We are clearly entering a time of higher costs, and plan sponsors that act now will be in the best position to assure quality care for their members while managing these high costs.”

Specialty drugs now account for 30 percent of total drug costs; Prime predicts they will reach 50 percent of total drug spending by 2018.

The following cost-controlling steps are outlined in the report:

  • Bridge the benefit divide. Use combined pharmacy and medical benefit data to see the full scope of specialty spending and seek solutions.
  • Focus on the biggest issues. Use combined data to target the most urgent issues, and focus on the areas that can provide the greatest return on investment.
  • Narrow the specialty network. Use cost-effective distribution channels, and limit the number of distributors to secure lower prices.
  • Embrace a management mindset. Make sure the right specialty drugs are used properly by those who will benefit the most from them.
  • Promote preferred-drug use. Create plans that encourage desired behaviors.
  • Protect members from high costs. Limit members’ out-of-pocket expenses, and use available tools to reduce the burden on highly vulnerable members.

Short videos about each of these steps are on Prime’s YouTube channel.

“Plan sponsors that are best managing specialty costs have the above actions in common,” said Duane Barnes, Prime’s senior vice president of consumer delivery. “By deploying these steps and taking a comprehensive approach to understanding specialty costs, plans can help their members access these important medicines and use them safely and effectively.”

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related External Article

Specialty Tier Pharmacy Benefit Designs in Commercial Insurance Policies: Issues and Considerations, Robert Wood Johnson Foundation, August 2014

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