Pharmacy benefits management is one of the most promising cost-containment methods that a self-insured health plan sponsor can employ to rein in the fastest-growing segment of healthcare spending. But success is often predicated upon targeting a small percentage of specialty medications that drive the lion's share of cost.
Although only 1% to 2% of the U.S. population have conditions that require these drugs, which account for 2% of all prescriptions, these scripts account for roughly 30% of all Rx spending, according to Corri Holcomb, senior vice president care management, customer solutions at UMR, a United Healthcare Company. Nearly half of these drugs cost more than $100,000 per patient each year to treat complex or rare conditions that require ongoing or intensive care coordination, she says in an interview, noting how costly they can be.
Many specialty drugs are known as biologics that are derived from living cells and very difficult to manufacture. Holcomb explains that this makes them much more expensive than traditional drugs. Significant differences in the reimbursement methodology of these specialty drugs "can result in wide disparities in cost," she adds. Some of the most expensive and cutting-edge treatments include cellular and gene therapies totaling more than $2 million per administration and requiring repeated treatments. This is why she says an important consideration is the total cost over a lifetime of that disease process.
Given these challenges, there are a number of multiple cost-savings strategies that can be employed. Among those programs that UMR uses: prior authorization, step therapy, preferred products, medical necessity criteria, built-in management, file reviews, claims adjudication, site-of-care redirection and special-investigation units. Other efforts include carving out specialty medication management and point solutions.
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Bruce Shutan
Bruce Shutan is a Portland, Oregon freelance writer who has written about the employee benefits space for more than 100 publications or corporate entities for 32 of his 37 years in journalism. He also has been quoted about benefit trends in The Wall Street Journal’s interactive edition and syndicated radio program on work-life issues, Reuters and other media outlets.
