A Summary of PBMI's 2013 Specialty Drug Benefit Report

Results from the second annual Specialty Drug Benefit survey reveal that plan sponsors still know very little about specialty drug spending. Transparency of specialty pharmacy rebates, specialty copay assistance programs, and the selection of lower-cost sites of care are expected to be topics of increased interest in the coming year.

The results of the Pharmacy Benefit Management Institute’s (PBMI) 2013 Specialty Drug Benefit Report were revealed at this year’s PBMI Drug Benefit Conference in Las Vegas, Nevada. Based on survey responses, investigators conclude that there is still a relatively low overall level of employer understanding regarding the management of specialty medications.

The report, which was created through a sponsorship with Walgreens Specialty Pharmacy, was based on survey responses of 306 United States employers, health plans, and other plan sponsors representing approximately 17.6 million lives. This sample size is slightly larger than that covered by last year’s inaugural report, which surveyed 291 organizations. This year’s report features a breakdown of results by employer size, as well as additional survey questions regarding specialty rebates, infusion care, copay cards, and medical benefit reporting.

In her overview of the report findings at the recent PBMI conference, Brenda Motheral, BPharm, MBA, PhD, executive director of PBMI, noted that much like last year, specialty pharmacy spend is the top concern of plan sponsors (55%). The second greatest concern is drug acquisition cost, with 19% of respondents listing it as their greatest worry. A large portion of participants (73%) noted that their top goal in the management of specialty medications was to reduce inappropriate use of expensive specialty products, whereas 52% said reducing drug acquisition cost was their second priority.

Despite the fact that now most health plans have adopted pharmacy management strategies, adoption of medical tracking and management continues to lag. While 94% of respondents reported they were able to track outcomes for specialty patients under the pharmacy benefit (with prior authorization being the number 1 management tactic), only 24% said they were able to adequately manage cost under the medical benefit.

From PBMI's 2013 Specialty Drug Benefit Report

Management of specialty drugs under the medical benefit

Much of the specialty spend seems to be hidden in the medical benefit, and the management strategies employed by plans were examined in PBMI’s survey. In an effort to avoid high drug mark-ups from physician buy-and-bill, 53% of employers are currently moving specialty medications from the medical benefit to the pharmacy benefit. This shift can be facilitated by “white bagging” practices, which allow the payer to purchase drugs directly from a specialty pharmacy, effectively bypassing the distributor-to-provider distribution channel. Requiring the use of a specialty pharmacy by plans also may cut down on extra costs from buy-and-bill transactions. Overall, detailed reporting about the specialty spend under the medical benefit is lacking, claims the report, with 71% of plans receiving cost and utilization trends by drug and only 50% getting reports showing drug utilization by site of care. Although plans may have access to detailed information, data presented later in the report reveal that employers may not actually be well-acquainted with the items presented on these reports.

Very few plans are structured to “encourage the selection of lower cost sites of care or use prior authorization to influence the infusion location,” asserted the report. Where a drug is administered can have a high impact on the cost of that medication, but nearly 40% of all participants indicated that they were not sure which site of care was associated with the lowest cost—and nearly 11% of those surveyed thought that all sites of service produced equal cost. According to Dr. Motheral, 58% to 70% of plans are not currently incentivizing their lowest cost site of care.

From PBMI's 2013 Specialty Drug Benefit Report

Choosing an alternate treatment site for infusion therapy can potentially save plans money, noted the report, and “unlike some traditional cost-containment programs, savings are generated without the need to deny or reduce care.” Additionally, the PBMI report noted that most of the cost for drugs covered under the medical benefit is incurred in the outpatient hospital setting, and this trend is a result of large hospital systems buying small physician practices. Because these settings are considered “extensions of the hospital system,” providers can bill like a hospital would.

Cost sharing tools

The report predicts there will be an uptick in the use of manufacturer-driven copay assistance programs, but more than half of employers do not plan to add these programs to help patients afford their medications. For specialty medications, which have few or no alternatives, copay level has been shown by many studies to affect patient adherence level. Although reduced copays may help a patient stay adherent, these programs are considered unclear and complex by both patients and employers. As a result, Dr. Motheral noted, the industry can expect increased transparency surrounding the use of manufacturer rebates.