Four core strategies used to manage outpatient specialty pharmacy costs

Thirty of thirty-eight Blue Cross Blue Shield health plans surveyed by the Blue Cross Blue Shield Association use a core set of four traditional pharmacy management strategies for outpatient specialty pharmacy: prior authorization, formulary management, utilization review, and claim review for appropriate dosage. Prior authorization — the most common strategy — was implemented by 83.3 percent of respondents, followed by claim review (82.8 percent), formulary management (76.7 percent), and utilization review (70 percent).

The health plans reported that they were more likely to carry out these strategies in-house than to use a vendor. The survey appeared in a recent issue of Health Affairs.

Plans reported that before 2003 they used more in-house programs than outside vendors to manage these costs. In 2003, the number of programs used by the health plans to manage these costs began to rise. The plans in the survey reported implementing 17 new vendor contracts in 2003, an increase from only two in 2002. Eighteen in-house programs were implemented in 2003, an increase from 10 the previous year.

Some plans also reported working with providers and patients to manage the use of specialty pharmaceuticals.

Strategies geared toward providers included providing educational materials and offering incentives to encourage use of specific places of service (home vs. hospital vs. physician's office).

The majority of plans also communicated with their members about specialty pharmacy. This involved providing members with information about service location, methods of obtaining drug products, and information to help members understand benefit design and the importance of taking their medication.

Management of specialty pharmaceuticals, 2003–2005

Source: Blue Cross and Blue Shield Association Outpatient Specialty Pharmaceutical Strategy Survey, 2005

Career Opportunities

HAP, a subsidiary of Henry Ford Health System, is a nonprofit health plan providing coverage to individuals, companies and organizations. This executive develops strategies to meet membership and revenue targets through products, pricing, market segmentation and advertising.  Aligns business among Business Development, Commercial Sales, Medicare and Public Sector Programs and Product Development. Seeks to enhance and be responsible for business development and expansion through the development of an effective product portfolio, strong interpersonal relationships and service excellence.

Apply via email to or online at

Subscribe to Our Newsletters

Monthly table of contents

Be notified as each issue of Managed Care is available online.

Biweekly newsletter

Recent topics have included:

PTCommunity news

New drug approvals, clinical trials, drug management. Three times per week.


Managed Care
By Peter Wehrwein
Managed Care
By Howard Wolinsky