The pharmacy benefits management (PBM) landscape is constantly evolving, prompting plan sponsors to prioritize metrics that deliver actionable insights into their prescription drug spending. One such emerging metric is the Specialty Dispensing Rate (SDR). Understanding and optimizing SDR can play a crucial role in managing costs and evaluating PBM performance. This blog will introduce SDR, explain its importance, and illustrate its impact through practical examples presented in tables.
What Is the Specialty Dispensing Rate (SDR)?
The Specialty Dispensing Rate (SDR) is defined as the percentage of all dispensed prescriptions that are specialty drugs. Specialty drugs are high-cost medications used to treat complex, chronic conditions such as cancer, rheumatoid arthritis, and multiple sclerosis. These drugs often require special handling, administration, or monitoring.
Calculation of SDR:
SDR = (Number of Specialty Drug Prescriptions / Total Number of Prescriptions) x 100
Why Is SDR Important?
Specialty drugs, while accounting for a small percentage of total prescriptions, represent a sizable portion (∽50%) of total drug spending due to their high costs. By tracking SDR, plan sponsors can:
- Evaluate PBM Performance: A higher SDR may indicate that a PBM is not effectively managing specialty drug utilization, potentially leading to unnecessary costs.
- Manage Costs: Understanding SDR helps identify trends in specialty drug usage, allowing for targeted interventions to control spending.
- Improve Patient Outcomes: By monitoring SDR, plan sponsors can ensure appropriate use of specialty medications, enhancing patient care.
Impact of SDR Differences: Practical Examples
Let’s illustrate how differences in SDR can impact overall drug spending using two examples.
Assumptions:
- Average Cost of a Non-Specialty Prescription: $100
- Average Cost of a Specialty Drug Prescription: $8,500 per 28-day supply
- Analysis Considers SDRs of 1%, 2%, 3%, 4%, 5%, and 6%
Specialty Dispensing Rate increases might seem modest on paper but have substantial financial repercussions in practice. In example two, raising the SDR from 3% to 4% would result in an additional cost of $4,569,600. If the rate were increased to 5%, the extra expense would climb to $9,130,800. Pushing the SDR even further to 6% would amplify the additional cost to a staggering $13,700,400! These insights highlight the significant impact that small percentage changes in the SDR could have on self-insured employers’ overall financial obligations.
Action Steps for Plan Sponsors:
- Establish a Baseline SDR: Know where you stand to measure progress effectively.
- Monitor Regularly: Keep a close eye on SDR trends and associated costs.
- Engage Stakeholders: Collaborate with PBMs, healthcare providers, and patients to manage specialty drug utilization.
- Implement Cost-Saving Strategies: Use the insights gained to optimize your pharmacy benefit plan.
Conclusion
TransparentRx’s Solution Stacking cost management process tackles rising specialty dispensing rates (SDR) head-on, ensuring specialty drugs are dispensed only when clinically necessary and at the lowest possible cost. Each step in the process—from TransparentPA® reviews to identify cost-effective alternatives to Transparent340B’s discounted pharmacy network—reduces unnecessary specialty drug utilization. Tools like TransparentPGx® optimize medication selection through genetics, while TransparentMTM® provides ongoing medication therapy management, ensuring the appropriate prescribing and efficient management of specialty drugs.
This comprehensive approach enables plan sponsors to monitor and control SDR, which is a key driver of pharmacy costs. TransparentRx provides the transparency and strategic insights needed to optimize specialty drug utilization, reduce costs, and improve patient outcomes—all while ensuring a fiduciary standard of care.
