Though the medications are used by only a small percentage of the population — about 1 to 5 percent — spending on specialty drugs has grown between 15 and 20 percent for several years. That is expected to continue to outpace nonspecialty spending for several reasons: a high percentage of newly approved drugs will be specialty, expensive manufacturing processes will continue to push prices higher, and competition will continue to be limited within the therapy classes.

Encouragingly, a new report from the Pharmacy Benefit Management Institute suggests that specialty pharmacy costs are a top concern among employers. More than 66 percent indicated that they had contracted with a specialty pharmacy network and formulary. Only 19 percent felt that they had a high knowledge of specialty pharmacy management. Further, 69 percent reported wanting more education about specialty pharmacy, a positive sign for health plans and pharmacy benefit managers.

Employers’ most common techniques for managing specialty drugs are prior authorization of selected drugs covered under the pharmacy benefit (83 percent) and clinical care management programs, often through the specialty pharmacy vendor (83 percent). Use of a formulary and a contracted specialty pharmacy network is now common as well, with about 70 percent of employers reporting either or both methods. Step therapy has grown quickly (61 percent of employers), probably because it has worked well for traditional medications.

These cost-control techniques have become endemic among health plans, according to the report. More than 90 percent use prior authorization for specialty drugs covered under the pharmacy benefit. Fifty-four percent have a separate cost-sharing tier for specialty drugs, compared to 36 percent of employers. In addition, 55 percent of health plans report using prior authorization under the medical benefit, compared to 37 percent of employers.

Contrasting cost management methods of employers and plans

Percent using technique

Source: 2012 Specialty Drug Benefit Report, Pharmacy Benefit Management Institute

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.