Specialty Drugs Provide Financial Challenges for Employers

Specialty drugs have significantly changed the healthcare world and provide value to patients with previously incurable diseases. While these drugs improve treatment, they come with a large price tag, with specialty spending expected to reach $400 billion within the next 3 years.
Results from a large survey conducted by Anthem, Inc and C + R Research suggest that large group employers are currently struggling to afford specialty drugs and they are using unconnected tools and techniques to manage the trend.
Included were 303 large group employers surveyed between December 2015 and January 2016.
The authors discovered that the costs of new specialty drugs were the most concerning to employers, with 90% reporting that the costs were “somewhat challenging” or “very challenging,” according to the survey.
Additionally, a majority of employers indicated that specialty drug spending increased since the previous year, with the drugs accounting for an average of 35% of pharmacy costs. Employers also indicated that obtaining rebates and drugs administered in outpatient settings provided cost-related challenges.
Since more employees are receiving treatment with specialty drugs, employers must spend more time managing the benefits. One-third of the time respondents spend on health benefits was specifically for specialty drugs, according to the survey.
Importantly, employers are looking for innovative ways to control spending on specialty drugs, as there is not a single approach that can work for all. In the survey, employers were asked to rate the importance of specialty drug management techniques and tools they used, with nearly all tools ranking somewhat or very important.  
Utilization management was ranked important by all surveyed, with 74% of employers ranking it as very important, according to the survey.
These results suggest that employers are using more approaches to manage specialty drug spend. Many are not using tightly managed strategies, which may create savings, but can limit drug or pharmacy choices, according to the study.
The authors noted that while employers are adopting individual tools and techniques, there has yet to be a standard strategy adopted for specialty drug management.
Previous studies suggest that integrating medical and pharmacy benefits can improve patient outcomes and improve cost management. This may be key for specialty drugs since they are generally covered under both benefits, according to the study. The authors recommend that employers pursue this approach.
While 70% of employers considered themselves to be very knowledgeable about specialty drugs, nearly all expressed an interest in obtaining additional education.
In the future, the authors suggest that employers should play an active role in specialty drug management, including how and where it’s administered and where the prescription is filled.
Another initiative the authors urge employers to adopt is to ensure that reporting for medical and pharmacy benefits is accurate and coordinated. Inconsistent reporting across both benefits can lead to uninformed decisions, according to the study.
Employers are enouraged to ensure that drug management should be clinically appropriate by focusing on drugs with beneficial clinical and real-world outcomes. While a drug may come with a higher upfront cost, it could actually lower overall spending due to hospitalization avoidance.
Employers should also evaluate channels and sites of care that are appropriate and cost-effective. Additionally, care management should be included in a comprehensive management strategy, and can include outreach from health plan case managers or care management specialists from a specialty pharmacy, the study concluded.

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