Plans & employers step up controls on specialty pharmacy

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