Specialty tier falling out of favor because of access issues

Key Points

SPENDING GROWTH for specialty drugs rose 19.6% between 2009 and 2010, while growth of traditional drugs decreased by 1.4%, according to Express Scripts' 2010 Drug Specialty Report. Payers are struggling to appropriately manage high-cost drugs while ensuring their members get the care they need. One strategy is introducing a specialty drug tier to the formulary, which raises a red flag on access issues.

In 2010, New York became the first state to pass legislation prohibiting insurers from creating specialty drug tiers. A number of other states have either proposed legislation or are planning to do so to protect patients on specialty drugs.

"Health plans must find ways to balance serving the needs of the 2% of Americans who use specialty drugs-these medications are expected to eat up 40% of total drug spend by 2014-while still preserving their ability to provide a pharmacy benefit for all members in the future and not risking the end of specialty coverage," Kulawiec says.

Bill Martin, group vice president of business development for Accredo Health Group, a specialty pharmacy based in Memphis, considers the specialty pharmacy tier to also be a tool-one for managing the total cost of care and in turn, ensuring broader coverage at affordable prices to all members.

He says responsibility for establishing a fourth tier falls into the laps of payers who must perform a delicate balancing act between what the member pays and ensuring that everyone's needs are met.

"There are ways to responsibly manage the high cost of specialty drugs by not denying care, but rather by encouraging the use of less costly alternatives," Martin says.

It comes down to providing the right drugs to the right patients, he says, referring to drugs that might be costly but perform effectively for certain patients. Savings also are accrued by avoiding future expensive complications.

Payers typically offer manufacturers a secure position on formulary in exchange for rebates.

"Our members are focused on how to sustain coverage and ensure that specialty drugs are safe, affordable and accessible," says Susan Pisano, vice president of communications for America's Health Insurance Plans in Washington, D.C. "This is a daunting problem because of the underlying pressures due to very high costs for these drugs and unsustainable increases year to year. We hear from both employers and individual consumers that they just can't handle any more in premiums."

If the amounts being charged by manufacturers continue to rise, it will increase premiums and could increase the ranks of the uninsured, she says.