5 strategies for sponsors to manage specialty drugs

April 1, 2014

Both the clinical potential and costs associated with specialty drugs have grown rapidly over a relatively short period of time.

Both the clinical potential and costs associated with specialty drugs have grown rapidly over a relatively short period of time, according to Kathleen Fairman, Pharmacy Benefit Management Institute vice president of research and education. “Within the pharmacy benefit, plan sponsors have clearly adapted to these challenges using proven utilization management tools,” she says. “For specialty drugs covered by the medical benefit, however, the majority of plan sponsors are still in the learning stages, and we expect both knowledge and management strategies to develop more fully in the next five or so years.” 

1 Quality time management

Although employers rank specialty drug cost as a top concern, the time spent on specialty drug management does not match to proportional expense, according to PBMI’s 2014 Specialty Drug Benefit Report.  Specifically, industry estimates suggest that specialty drugs currently represent more than 30% of total prescription drug expense, and that proportion is expected to grow to more than 50% by 2017 or 2018. However, only 16% of employers overall (including 20% of larger employers and 10% of smaller employers) spend more than 30% of their drug benefit management time on specialty medications.

2 Knowledge is power

Lack of knowledge of specialty drug management is a problem in the medical benefit more often than in the pharmacy benefit. Specifically, many specialty medications can be reimbursed either under the pharmacy benefit (i.e., drugs dispensed from pharmacies) or under the medical benefit (e.g., drugs administered in the physician office or outpatient hospital). When queried about knowledge of specialty medication management, employers are much more likely to rank their knowledge level as “low” when asked about the medical benefit than when asked about the pharmacy benefit.

3 Mainstream utilization tools

Use of common utilization management tools in the pharmacy benefit has increased dramatically in recent years and has become mainstream. For example from 2011 to 2013, use of prior authorization for specialty drugs increased from 82% to 90%; use of a preferred products list or formulary increased from 68% to 85%; and use of step therapy increased from 60% to 74%. However, use of these tools in the medical benefit is lagging behind at 68% for prior authorization, 44% for preferred products/formulary and 43% for step therapy.

4 Narrower networks

Pharmacy networks for specialty drugs are becoming increasingly narrower and more specialized. Among those not subject to regulatory requirements prohibiting them from mandatory use of specialty pharmacies, more than one-half (54%) mandate specialty pharmacy use for all medications, and another one-quarter mandate specialty pharmacy use for some medications. When asked about the coming year, 29% plan to decrease access to specialty drugs in retail (community) pharmacies.

5 Promotion of copay assistance

Awareness of copayment assistance programs is growing but not yet producing active management. Overall, 72% of employers report having no specific plans to address the availability of these programs; 12% expect to actively promote them; and 10% expect to actively discourage their use.

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To read the PBMI 2014 Specialty Drug Benefit report, go here