Insurers Surveyed by EMD Serono Identify Challenges, Strategies for Specialty Pharmaceuticals

Complexity of specialty drugs leads most health plans to create specific rules for coverage, cost share, and benefit management, survey indicates.

With spending on specialty drugs expected to quadruple by 2020, it is extremely important for health care providers to rise to challenges related to drug cost and patient adherence in order to adapt to changes in the growing market, according to the results of a recent survey.

In the annual EMD Serono Specialty Digest, released on April 1, 2014, 91 health plans representing 124 million covered lives were surveyed on topics including specialty pharmacy services, management of benefits, and goals for improving current operations.

Annual spending on specialty drugs is expected to grow from $87.1 billion in 2012 to $401.7 billion by the year 2020. Just 3.6% of patients covered by plans included in the survey currently account for 25% of overall health care costs, and the report estimates that spending on specialty drugs will comprise 50% of overall drug spending by 2018.

“Managing specialty drugs is critical not only to control drug costs, but also to provide the best possible clinical management to patients,” the report authors write. “Because the drugs and the conditions they treat are complex, management can be more complicated than that of traditional drugs.”

Simply defining which drugs are classified as specialty products can be a challenge for health plans, as each entity brings a varying perspective and slightly different definition. Factors identified by health plans in the classification of specialty drugs are high cost; treatment of complex diseases requiring special monitoring; treatment of orphan, uncommon, or rare diseases; availability of limited distribution from manufacturers; used for disease already classified as specialty; and the requirement of patient administration training.

In Medicare Part D, drugs that cost $600 per month or more can be classified as specialty. Meanwhile, 40% of health plans surveyed categorize a drug as specialty if the minimum monthly cost per prescription is between $600 and $800, and another 46% categorize a drug as specialty if the cost per prescription exceeds $1000.

Given the complex nature of specialty drugs, most health plans create specific rules for coverage, cost share, and benefit management. In terms of pharmacy benefit cost share, 53% of commercial plans establish specialty drug cost share tiers, while 54% of commercial plans require separate cost share for medical benefit specialty drugs. With the United States still awaiting the first FDA approval of a biosimilar, 32% of surveyed plans indicate that they intend to create a separate cost share tier for specialty generics and biosimilars once they are available.

Another significant challenge identified by health plans relates to patient adherence.

“Patients starting on a new drug might stop taking their medication before the monthly supply is depleted, which may result in medication waste,” the survey authors write. “A recent innovation in drug therapy management is the deployment of partial fill strategy for select drugs, where the pharmacy dispenses an initial supply (typically for 2 weeks of therapy) to test the patients’ tolerance to therapy.”

Among the benefits of partial fill programs identified by payers are improved adherence and superior management of side effects. A partial fill program is employed by 42% of plans surveyed, among which 84% use partial fill for oral oncology medication, 42% for oral hepatitis C virus medication, and 24% for oral multiple sclerosis medication.

The top 3 strategies identified by health plans for increasing patient adherence are reliance on specialty pharmacy providers (68% of respondents), assigning patients to disease/case management (56%), and implementing prior authorization to monitor adherence (56%). Additionally, 40% of plans indicate specialty pharmacy providers are very effective at managing adherence.

As part of last year’s survey results, almost 70% of health care plans said they relied on specialty providers to help increase adherence, but 66% said they were not satisfied with their provider’s results in that area.

Due to challenges related to distribution, handling, and patient support, many health plans adopt specialty pharmacy providers. Half of the plans indicated they are satisfied with their specialty provider distribution services, which provide access to limited distribution drugs, coordinate reimbursement and eligibility, seek financial assistance for patients, and offer distribution through a retail outfit, the report states.

Approximately two-thirds of respondents indicate the main challenge facing providers is a lack of internal resources to adequately manage all aspects of specialty drug management. Other challenges identified were the variability in oncology treatment and determining the overall value of therapy.

In terms of top goals, at least 58% of health plans said the integration of specialty drugs across pharmacy and medical benefits is one of their top priorities, while managing the drug cost trend, improving patient adherence, implementing shared risk payment reforms with providers, and aligning provider reimbursement across sites of care were also listed among the plans’ top goals for the future.

The survey also found that payers do not plan to implement a number of possible strategies, including establishing incentives for patients and providers for a lower cost share as a means to improve adherence, encouraging discussion between patients and physicians on end-of-life treatment options, and reference-based reimbursement, an approach designed to reduce the amount plans pay for medications and services.

“Health plans must balance need to control health care expenditures with the achievement of improved health outcomes for their members and clients,” the authors write.