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Plans vary in specialty-drug benefit models


A recent online survey from Serono Injectables Digest, which includes data from 83 health plans, looked at the challenges and strategies of managing specialty pharmacy, provider reimbursement and cost sharing.

There is not enough being done to manage specialty pharmacy," says Atheer Kaddis, vice president, managed markets for Diplomat Specialty Pharmacy in Swartz Creek, Mich. "Stakeholders have not moved as aggressively on initiatives as they had talked about."

Chad Murphy, pharmacy manager, clinical services for Premera BlueCross in Seattle, has a divergent view. He notes that health plans are continuing to expand and develop clinical and utilization-management programs to promote the appropriate use of specialty drugs and to target therapies to appropriate patients.

Both pharmacists participated in the EMD Serono Injectables Digest recent online survey developed by Rxperts for EMD Serono, a pharmaceutical manufacturer based in Rockland, Mass. The 4th edition of the report was released at this year's Academy of Managed Care Pharmacy meeting in San Francisco.

The survey asked health plan pharmacy and medical directors about the challenges and strategies of managing specialty pharmacy (SP), provider reimbursement, cost sharing and the use of SP providers. While many responses reaffirmed trends from last year, others signified steps in a new direction.


Although the majority of health plans in the survey say they implement flat cost share for specialty drugs under the pharmacy benefit-primarily with copayments-as many as a quarter of HMOs and PPOs use coinsurance. Among those using a tiered cost share for specialty drugs under the pharmacy benefit, which fewer plans reported using, coinsurance seems to be the preference over a flat-fee arrangement.

Michael Rothrock, director of pharmacy for Coventry Health Care in Pittsburgh says that his plan still relies on three tiers-the second for preferred and the third for non-preferred brands-with copayments of $25 and $50.

For injectables under the medical benefit, coinsurance is more common than copayments; however, only 26% of HMOs and 22% of PPOs applied any cost share.

"I am not sure what is driving a move to coinsurance, but when sick people are asked to pay more for their medications, adherence falls off," Kaddis says.

Leslie Fish, senior director of pharmacy services for Fallon Community Health Plan in Boston, is concerned that coinsurance could top out if maximum limits are not imposed.

Kaddis also believes that there should be a more level playing field between cost sharing under the pharmacy benefit and the medical benefit to more effectively manage drugs.


The average wholesale price (AWP) is still the most common price reference with more than 85% of health plans using it to reimburse retail pharmacies and specialty pharmacy providers, and 50% using the methodology to reimburse physicians, home health agencies and infusion centers. On the other hand, the average sales price (ASP) methodology is increasing, but only about 30% of plans use it to reimburse home health agencies and infusion centers.

Kaddis says he is surprised that more plans have not adopted ASP because AWP actually provides more wiggle room for providers, but "reducing reimbursement for outpatients is risky."


At the top of the list of the most effective strategies to control drug trend and manage the patient clinically are in-house prior authorization, specialty-pharmacy-provider contracting; and prior authorizations and step edits under the pharmacy benefit.

"Plans are using the same strategies-utilization management and prior authorization-as they do for managing traditional drugs for chronic disease, however, few respondents mentioned the use of disease management, which is used for these traditional conditions," Kaddis says.

Other conditions require more strategic management.

"The oncology category brings on many challenges, such as patient demand for treatment, lack of published clinical guidelines and outcomes data, and doctor buy and bill," says Michael Dezelan, senior vice president, managed markets for EMD Serono.

Surveyed health plans report using a variety of strategies to manage the cost and utilization of oncology drugs: prior authorization for supportive care drugs (75%); requiring a compendia listing for off-label drugs (72%); and not covering off-label drugs at all (67%).

"Right now, specialty pharmacy is focused on the low-hanging fruit in oncology," says Eric Cannon, director of pharmacy, SelectHealth/Intermountain Healthcare in Salt Lake City. "There are a lot of dollars in oncology, but programs are difficult to implement with so many drugs that act differently and treat so many kinds of cancer conditions."

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