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Prior authorizations are here to stay. Are yours working against you? Find out.
At its simplest, the top three factors impacting medication spending are the massive increases in number and cost of specialty medications, the backlog of generics awaiting FDA approval and medication nonadherence.
According to a recent presentation delivered to the Pharmaceutical Care Management Association (PCMA) by Doug Long, vice president of industry relations for IMS Health, spending on specialty medications increased 12.3% to $411 billion in moving annual total as of September 2015. Hepatitis, diabetes and oncology drugs are the primary drivers. He also reported that the growth rate in specialty medication cost is 23%, compared to traditional medications which grew at just 8% YTD as of September 2015. New brand spending increased by $19.8 billion in the last 12 months, and more than 75% of new brand spending is on specialty medications.
According to a recent report from The Pew Charitable Trusts, less than 1% of all prescriptions were written for specialty drugs in 2014, yet they accounted for approximately 32% of total drug expenditures.
The Pew report further states, “Utilization rose by 5.8% in 2014 because of increased use of existing drugs and the introduction of new pharmaceuticals. In 1990, only 10 specialty drugs were on the market. Currently, approximately 300 such drugs are on the market, 19 of which became available in 2014 alone. And nearly 700 specialty drugs are under development.”
While FDA struggles to clear an enormous backlog of generic applications in order to bring competition and price relief to the specialty drug market, one area that needs your immediate attention is your prior authorization process.
Medication nonadherence is still a major concern. Are your (or your PBM’s) prior authorization requirements actually making it worse?
According to a report from the Centers for Disease Control and Prevention, medication nonadherence accounts for $100 billion to $289 billion in wasted healthcare spending every year.
Minimize the impact of this by ensuring prior authorization processes are not creating unintended consequences or barriers to adherence that lead to potential for resistance to high-cost therapies like Harvoni.
Just as night follows day, as specialty drugs proliferate we have seen a commensurate, volumetric increase in prior authorization requirements from payers and PBMs. This would be fine if these obligations didn’t fall immediately at the feet of prescribers and the amount of time clinicians spend with their patients wasn’t already as little as seven minutes per visit.
In addition to the increase in the number of drugs requiring them, some prior authorization forms have reached 10 pages or more in length. The clinical party responsible is now forced to choose between completing another administrative task or serving more patients. It’s a lose-lose proposition for clinicians and patients.
There can be as few as three or four line items among those pages within a single prior authorization form critical to fair evaluation and patient access. Yet we have seen some patients have their prescriptions authorized and filled, only to learn that the refills of Harvoni require monthly prior authorization approval from their PBM or payer. This process puts the patient at risk of resistance to therapy and the payer at risk of massive amounts of wasted spending on prescription drugs.
Evaluation of your prior specialty medication authorization requirements for patient populations with high volume impact, such as hepatitis C, should be a top priority in order to improve the value derived from specialty drugs. This step should improve outcomes and reduce costs for all concerned.
At the end of the day, all members of the healthcare continuum should ask themselves how does any program contribute to positive value, where value equals outcomes divided by costs? This applies to chronic care for HIV treatment, hepatitis C treatment, diabetes or any condition requiring specialty medications.
Marc O’Connor is chief operating officer for Curant Health. Curant Health treats patients nationwide through its medication management protocols.