It’s inevitable — growth in drug spending will be propelled by greater use of biologics. The Food and Drug Administration approved only eight new biopharmaceuticals from 2005 through 2007, which suggests that at the moment, additional indications for existing products, rather than new products, account for the bulk of increased specialty drug use. In time, however, it’s expected that new products will contribute more heavily, given the sheer number of biopharmaceuticals in development.

It follows that the share of total drug spending attributed to biologics will increase dramatically. The trend is unmistakable: Specialty drugs accounted for between 10 percent and 20 percent of prescription drug spending in 2006. Express Scripts predicts that by 2010, they will account for more than one fourth of all drug spending, and Aon Consulting has estimated that biologics’ share will hit 37 percent by 2020.

Which biologics will enjoy the greatest growth? Look to monoclonal antibodies — for example, trastuzumab (Herceptin), infliximab (Remicade), bevacizumab (Avastin), adalimumab (Humira), and rituximab (Rituxan) — all of which treat either chronic conditions or cancer, according to Datamonitor, a business intelligence company.

The financial implications raise questions about the value of biopharmaceuticals. Perceptions of value by various stakeholders — manufacturers, purchasers, payers, physicians, and patients — are explored in “Biologic Therapy Management,” a peer-reviewed white paper by the Biologics Finance and Access Council, which accompanies this issue of MANAGED CARE.

Specialty drugs gain on traditional drugs (billions)

Source: Express Scripts 2007

Health care spending is concentrated in people with multiple chronic conditions

Four fifths of the nation’s health care bill is for people with one or more chronic illnesses.

Source: Chronic Conditions: Making the Case for Ongoing Care from Partnership for Solutions. (

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.