The Employer's Guide Blog for Overseeing PBMs

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Specialty Drugs: A Proactive Approach to Sustained Cost Containment

Specialty drugs have been known for their high costs well before Sovaldi started making headlines at the end of 2013.  Sovaldi, the now infamous $1,000 a pill drug used to treat hepatitis C, got plenty of media attention; however, no real solutions to the high cost have been adopted.  This leaves the management of this $90,000 treatment, along with other specialty drugs, in the hands of health plans.  Specialty drugs fall into two distinct categories when it comes to the administration and management of health plan costs. 
Sovaldi and other new biologic medications fall are patent-protected drugs with no generic or brand substitutes.  The pricing power of drug manufacturers with this type of monopoly is powerful and alternative ways of management must be considered.  The first step a health plan can take is to pre-authorize the treatment by verifying the treatment plan with the member’s physician.  

Payors must engage specialty pharmacies, which can aid in the patient-centric high-touch model of care required when dealing with members taking specialty medications.  The TPA and specialty pharmacy both have a role in order to ensure the appropriateness of care and compliance with the treatment plan.  One key to effectively monitoring and managing this class of specialty drugs is continuous engagement with the patient and the provider.
Exclude extremely high-priced medications when an effective alternative exists; this is where the largest impact on the cost of drugs can be made.  Drugs falling into this category have been evaluated and the FDA has determined that an effective and cheaper alternative exists.  Many health plans have step therapy programs in place that require trying a cheaper alternative drug before authorizing the more expensive brand drug.  
The key to managing escalating costs with specialty drugs is to be proactive and respond quickly to the changing environment.  For the first category of drugs (when no alternative exists), this requires closely monitoring the FDA approval process.  When a new drug is approved, the health plan should work with the specialty pharmacy to develop a plan of action to manage patients who will need the new treatment.  

For drugs with patents expiring, proactive outreach to members will let them know of available generic alternatives and how to coordinate a change in treatment with their physicians.  In either case, an aggressive management strategy is the only solution to mitigate the potential for wasteful spending.

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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