As many as 907 biologics targeting more than 100 conditions are currently in the pipeline, according to the Pharmaceutical Research and Manufacturers of America (PhRMA). More than one-third are cancer therapeutics, 176 candidates tackle infectious diseases and 58 drugs treat cardiovascular disease.
The annual growth in specialty drug cost is expected to increase 22 % in 2014 and by 67% for specialty drug spending by the end of 2015, according to Express Scripts.
Ruth Opdycke, president, TPG Healthcare Consulting, a pharmacy benefit consulting group based in Glastonbury, Conn., provides her take on how to manage costs for the onslaught of specialty drugs in the U.S. marketplace. She says the management tactics are multi-pronged and include:
- Distribution channel management and provider reimbursement models. Effectively negotiate for product level discounts in both the pharmacy and medical benefits.
- Site of care management. Identify and utilize the lowest site of care for product administration, such as hospitals, providers’ offices and home infusion services, especially for specialty products adjudicated under the medical benefit.
- Benefit design. Build appropriate designs to the extent possible given the 2014 and beyond changes to maximum out-of-pocket limits.
- Formulary control. Use preferred products and/or an overlay of the benefit design by excluding certain non-preferred specialty products altogether.
- Utilization management controls. Put in place clinical pathways, prior authorization, step therapy and quantity and duration limits.
- Outcomes oversight/management. Use clinical services to monitor patient response/outcomes to determine if the expected therapeutic outcomes are being achieved.
- Medical benefit adjudication. Assure that the medical benefit adjudicator has the appropriate claims benefit edits in place to manage specialty products that are administered under the medical benefit at the specific drug level.
Randy Vogenberg, principal, Institute for Integrated Healthcare in Greenville, S.C., is not as optimistic. He says payers really can’t effectively manage drug costs aside from cost shifting, which he believes does not dovetail with an emphasis on the total cost of care and effective patient management and outcomes.
Opdycke anticipates that therapeutic areas, such as breast and lung cancer, lymphomas, hepatitis C, multiple sclerosis and rheumatoid arthritis, will continue to fill the specialty pipeline.
Research conducted by Forbes uncovered what it believes to be the top five most expensive drugs:
- Soliris (average annual cost of $409,500) treats a rare blood disorder.
- Elapras ($375,000) improves walking function for those with Hunter Syndrome.
- Naglazyme $365,000) is an enzyme replacement therapy for patients with a group of metabolic disorders.
- Cinryze (350,000) treats a rare genetic disorder.
- Myozyme ($300,000) treats Pompe disease.