Specialty drugs make up the bulk of the pharma pipeline. These drugs continue to come onto the market with higher and higher price tags, so employers should become more familiar with these therapies in order to properly manage them. Precision’s Erin Lopata and Jorge Font weigh in on the other considerations beyond cost that employers need to know for managing specialty drugs.
What Do Employers Need to Know About Specialty Drugs?
Employers have long been concerned about costs for specialty therapies, but some may have been hesitant about putting too many restrictions on them. However, as these drugs continue to come onto the market with higher and higher price tags, employers should become more familiar with these therapies in order to properly manage them, industry experts suggest.
Over the past three years, specialty drugs have made up almost two-thirds of all new drug approvals, points out Katie Asch, Pharm.D., senior director and U.S. consulting pharmacy practice lead at Willis Towers Watson. And as these drugs make up the bulk of the pharma pipeline, employers should expect their utilization to continue to rise, she says. “Furthermore, specialty drugs are becoming more widely used in disease states like asthma or eczema that have historically been treated with less expensive inhalers or topical creams,” which also will result in increased utilization.
A variety of steps may be taken to ensure that employers truly understand these drugs and their value proposition. While much of their focus, understandably, is around the products’ increasing spend and trend, it’s important for employers “to understand that many patients with specialty conditions also incur significant direct and indirect medical costs related to their conditions,” declares Erin Lopata, Pharm.D., MPH, senior director of the access experience team at PRECISIONvalue. “Direct costs can include symptomatic treatments, procedures, hospitalizations and use of durable medical equipment. Indirect costs may include impacts to the employee’s productivity as they manage their own condition or serve as a caregiver to a dependent. Understanding the complete picture of disease burden and cost will be critical to effectively implementing models that minimize risk and improve predictability, while providing access to the appropriate patients. This is particularly important for value-based contracts, which also serve to describe the long-term value these treatments may bring.”
Employers Shouldn’t Hesitate to Manage
While some employers have been hesitant in the past to employ tactics to manage specialty drugs “out of concern for limiting patient access,” many therapeutic classes now have “multiple similarly effective and safe alternatives available,” says Asch. “There are 10 brand-name specialty biologics and a handful of biosimilars approved for treating plaque psoriasis, for example.”
She also states that many utilization management strategies have improved and “now may include automation that can check to see if a member has already tried prerequisite drugs and can make sure the proper dose is dispensed based on information contained in the member’s medical record such as age and weight. These enhancements can improve the member experience.”
In addition, “narrow or exclusive specialty networks can also generate savings, and the specialty pharmacies have multiple safety checks in place to make sure patients get their medications in a timely fashion, regardless of their geographical location,” Asch tells AIS Health, a division of MMIT.
Firms Need to Monitor Pipeline
“Employers have long been focused on specialty drug spending, as it has been a significant driver of their cost trend,” states Jennifer Wagner, director of the Business Group on Health. However, there are some new considerations for managing these drugs, she explains. For one, employers need to know about new specialty therapies before they launch. Because the drugs are “disproportionately expensive in the context of overall spend,…there is a pressing need to tie price to drug efficacy,” she says. Employers should closely monitor spend in the medical benefit and “should request full transparency on price, discount and/or rebate negotiations that may occur with respect to these specialty drugs,” as well as the agents’ safety and efficacy.
“In addition to monitoring the pipeline, employers should be evaluating the potential prevalence of plan exposure, through working with their partners,” adds Warner. Also, “total cost of care forecasting and implications become crucial knowledge in connection with managing specialty drug spend across the board. Employers should push their partners for integrated medical and prescription data.”
Jorge Font, MPH, senior vice president of the access experience team at PRECISIONvalue, maintains that “employers and many of the generalist brokers/consultants typically don’t understand the diseases in question, their frequency, the full economic burden and the process, efficacy and cost of the new therapies. The last thing they want is to pay a million dollars for a procedure that doesn’t work, so having guarantees and risk sharing in these agreements will go a long way to overcoming misperceptions, as it did with recent hepatitis C virus value-based contracting.”
However, asserts Asch, while the drugs’ prices seem to garner a lot of the attention around them, “many plan sponsors see the value these drug therapies bring to prevent disease exacerbations or progression, preventing high-cost ER visits and hospital admissions. These therapies help people to live better-quality lives and help to keep them productive and at work and in school and, in certain cases, significantly increase their life expectancy. Many plan sponsors have implemented high-touch case management programs providing nursing support to guide and direct patients struggling with rare conditions in how to get the care and support they and their loved ones need to manage their conditions and overall well-being holistically.”
Contact Asch vis Ed Emerman at firstname.lastname@example.org, Font and Lopata via Tess Rollano at email@example.com and Wagner via Alissa Kaplan Michaels at firstname.lastname@example.org.
by Angela Maas