The Employer's Guide Blog for Overseeing PBMs

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Prime Therapeutics Study: Number of ‘Drug Super Spenders’ Grew 63% In 3 Years

“Super Spenders” or people who spend more than $250,000 on prescription drugs each year is a small subset; of the over 17 million people that were included in the study, just 4,869 were super spenders for the year 2018, spending over $2 billion on drugs. But that group grew 63% from under 3,000 people in 2016 and accounted for an increase in spending of $795 million from 2016.

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There’s a reason so many rare disease drugs are emerging; traditional drug spending is trending down. Drugs that treat common diseases are increasingly available in cheaper generic forms. That means that pharmaceutical companies have to rely on the price of specialty drugs to avoid losing money. For example, sales of autoimmune drugs grew by 23% in 2017, according to a different study by Prime.

Tyrone’s Commentary:

In specialty pharmacy benefits management (SPBM), 70% of the initial prescriptions written are the right drug. By right, I mean the most cost-effective. It is the other 30% of prescriptions, written by doctors and authorized by PBMs, where the opportunity costs are hidden. Not that these specialty drugs are wrong or bad for the patient they just aren’t always the most cost-effective. Three essential considerations in specialty pharmacy benefits management are:

1) Clinical Appropriateness
2) Price or Reimbursement
3) Drug Mix

I cannot stress enough how important it is, for self-funded employers, to have systems in place to execute on those three considerations independent of your PBM’s reporting. This is especially true if the PBM is non-fiduciary and/or owns the specialty pharmacy. Moreover, continuous monitoring of the specialty pharmacy benefit on the medical side is just as important as it is on the pharmacy benefit. Medical Benefit Drug Claims or MBDCs are being reimbursed while going largely unchecked.

“There are very few true generic specialty drugs,” Dr. Jonathan Gavras, Prime’s chief medical officer, said. “The good news is these drugs are effective.” More than half of the money spent on drugs is spent on specialty drugs, which are being developed much quicker than traditional medicines. For example, 59 drugs were approved in 2018. Of those, 34 were drugs that treated rare diseases. Not all specialty drugs cost hundreds of thousands of dollars, but most drugs that cost that much are considered specialty.

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Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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