Drug management under the medical benefit is lagging the pharmacy benefit.

“At least 50 percent of drugs are dispensed under the medical benefit, and it’s often an area for financial opportunity, yet it’s the least managed,” says Brenda Motheral, MBA, PhD, executive director of the Pharmacy Benefit Management Institute.

The 2013 Specialty Drug Benefit Report from the institute says this is also evident when it comes to specialty drug rebates.

There is a big disparity between rebates under the medical benefit compared to the pharmacy benefit, she says.

Many factors contribute to the disparity, but the most important is that there are greater amounts available under the pharmacy benefit — “even though the amount spent on specialty drugs under the pharmacy and medical benefit are relatively even,” she says. “It’s a bigger gap than what’s warranted.”

Employer size is also a factor.

Brenda Motheral, MBA, PhD

“Nearly 50 percent of large employers have guaranteed specialty rebates. Compare that to only about 15 percent of small employers,” she says. Small employers are defined as 5,000 lives or less, according to the report.

The type of rebate arrangement varies between large and small employers, as well, with larger employers 24 percent more likely to have a flat guaranteed rebate amount per specialty prescription.

In contrast, 30 percent of smaller employers receive a smaller amount with no guarantee. That leaves a lot of money on the table.

In addition, only 19 percent of employers say they receive rebates for specialty medications filled under the medical benefit, 62 percent say they do not, and 19 percent don’t know.

The report says that there is little difference between large and small employers.

Health plans can help by providing rebate information to their employer clients, especially small ones. Human resources offices often don’t know what’s available, or they don’t ask the right questions, says Motheral. For employers, this is often a case of you don’t know what you don’t know.

“Health plans are hit and miss right now on the extent to which they have pursued these rebates, and it is a growing opportunity.”

Type of pharmacy benefit rebate arrangement by employer size

Source: 2013 Specialty Drug Benefit Report, Pharmacy Benefit Management Institute

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.