“No” isn’t the answer to managing specialty drug costs

Saying “no” to expensive specialty drug claims isn’t the best way to control costs. Instead, saying “yes” — to the right drug, the right person and the right channel by using the right drug management tools — is the most effective strategy. That’s the message I delivered to industry leaders at the Pharmacy Benefit Management Institute’s (PBMI’s) recent Drug Benefit Conference.

Say “yes” to managing across the benefit divide.

Today, more than 25 percent of employer group health care spending is on prescription drugs. More than one-third of this is specialty drug spend, and a large portion of that is under the medical benefit. By 2018, we predict that half of all drug spend will be specialty, with a large amount managed through the medical benefit.

Specialty trend drivers: Combined medical and pharmacy drug spend


Source: Prime Therapeutics 

Managing specialty drug costs means saying “yes” to the right tools.

Do you know your population’s specialty drug spend? More importantly, what are you doing about it? Having a clear understanding of these costs, and a complete strategy to manage them across the benefit divde is critical to keeping health care affordable.

  • Utilization management: Put prior authorizations, step therapy and quantity limits in place to assure members are getting the most clinically appropriate and cost-effective medicines at the right time.
  • Preferred drug management: Establish preferred products and formulary exclusions under both the pharmacy and medical benefit. Set out-of-pocket costs that drive preferred products, but don’t limit adherence.
  • Contracting management: Negotiate aggressive rebates. Implement medical-side fee schedules to ensure providers are incented to distribute the most cost-effective drugs.
  • Channel management: On the pharmacy side, maximize mail, 90-day supplies and limited networks. Optimize site of care on the medical side. Costs can vary by thousands of dollars based on this alone. Offer patient financial assistance for preferred drugs.
  • Care/case management: Offer counseling and patient services to ensure safe and effective drugs use, coordinated care and use of the preferred care network and specialists.

Saying “yes” and saving millions: A tale of two employers
Employers who optimize drug cost management tools are at a strong financial advantage, and the savings gap will continue to grow. In this example of two similar employer groups, employer A didn’t take advantage of a complete drug-cost management strategy — and that means they’ll pay nearly $34 million in excess drug costs.


Source: Prime Therapeutics 

Health benefits are personal, and decisions impact real people. However, it’s important for employers to understand that getting people the medicine they need doesn’t have to be at odds with managing costs. When employers say “yes” to the right tools, people get the right medicine, at the right time and with the right support — leading to improved outcomes, healthier, happier people and savings on the total cost of care.

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Senior Director, Health Outcomes

Steve plays a key role in assessing results of pharmacy benefit products and leads a team analyzing integrated medical and pharmacy claims data to develop and improve Prime’s clinical programs.