Managing specialty drugs: this is no time to flip a coin

So, should specialty drugs costs be covered under the pharmacy benefit or the medical benefit?

Short answer: Yes.

Better answer?  It depends:

  • On the drug
  • On the disease
  • On the person
  • On the delivery channel

It’s never as easy as heads or tails

Looking only at specialty drugs paid under the pharmacy benefit gives you a limited view. Especially since more than half of all specialty drugs are paid for under the medical benefit.

This split — the “benefit divide” — is perhaps the biggest barrier to effective management of specialty drugs. This division makes specialty drugs much more challenging to manage than traditional drugs. And the impact of specialty on the overall cost of care is greater than many realize. When medical-side claims are added to pharmacy-side costs, the total price tag for specialty is often shocking.

A better vantage point

Prime Therapeutics (Prime) has the ability to see and study medical-side drug spending because of our close collaboration with our clients. What we can see gives us a better picture of the right questions to ask in each situation.

For example, what goes where?

To start, it’s not just your drug costs. The programs you’re using to manage those costs are also up for consideration — like preferred drug management, utilization management, step therapy, narrow networks… and the list goes on. Which ones do you implement under the medical benefit? Which ones do you implement under the pharmacy benefit? How many programs are under both?

  • Where should utilization management (UM) be included? Things to consider: Does the data show that the member tried a first-line drug? Is the UM related to medical requirements and lab tests?
  • What about channel management? Things to consider here: Can the member be taught to give his or her own injections at home? Is an infusion center more cost-effective than a doctor’s office — and is it safe enough? Also, does a limited specialty pharmacy network or an exclusive specialty pharmacy have access to a particular limited distribution specialty drug?
  • Pharmacy programs add more balls to juggle. Using programs like step therapy, drug exclusions, formularies, and narrow networks help manage costs. These programs are, or can be managed across both medical and pharmacy benefits — which adds complexity.

Clearly, picking one side of the coin isn’t an option

The thing is, there’s no right or wrong side in this process. Some specialty drugs can be better managed under the medical benefit. And some are best addressed on the pharmacy side. Managing both benefits complicates the process, but it’s part of managing costs. Having a good pharmacy benefit manager will help make it easier.

Speaking of good pharmacy benefit managers…

Prime is aligned by design with our clients. We apply proven pharmacy benefit tools to specialty drugs on both sides of the benefit divide.

We take a big picture perspective, choosing the best tools for each situation, regardless of where claims are paid or care is administered. Prime is the most effective partner in managing your specialty spend across both medical and pharmacy benefits because of our:

  • Integration with clients
  • Aligned incentives
  • Clinical approach
  • Member-centric purpose

We help you manage both sides because we know how to do it right. Contact your Prime representative. We’d love to show you the view from up here.

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