New EMD Serono Report Sheds Light on Payer Specialty Drug Strategy

Results from a recent survey indicate that although payers are more familiar with specialty drugs, nearly half are not satisfied with their specialty pharmacy provider’s adherence measurements.

According to the results of EMD Serono Specialty Digest, 9th Edition, released on April 1, 2013, adherence is the top priority for health plans regarding specialty pharmacy management. The bad news: Nearly 70% of respondents said they rely on their specialty pharmacy providers to promote adherence in their health plan members, and nearly 66% also said that they are not currently satisfied with their specialty pharmacy provider’s efforts in this area.

This year’s installment of the specialty-focused report included 102 health plans representing 52% of lives represented by regional or statewide plans. Unlike last year, this year’s numbers were weighted by number of lives - a fact that greatly increases their accuracy. The survey addresses the management of pharmacy and medical benefit specialty pharmaceuticals by health plans in 2012 and identifies a number of common trends occurring across plans.

The survey revealed that only 51% of commercial plans (representing 32% of health-plan lives) had unique cost shares for specialty drugs through the use of specialty tiers. (In other words, 68% of health plan lives are covered by plans that use their standard cost share tiers to manage specialty drugs.) Given the concerns of employers and payers regarding how to manage the high costs of specialty medications in the future, it is surprising that nearly half of plans don’t have a strategy specifically tailored to deal with these elevated drug costs. When asked which strategies the commercial payers plan to use in the next 12 months, 34% said they expect to create additional cost share tiers for specialty drugs under the pharmacy benefit.

Utilization and Reimbursement Trends

Almost all plans (nearly 90%) use prior authorization (PA) to prescribe under the pharmacy benefit. Although PA was found to be less common for medical benefit drugs, 95% of plans require PA for oral oncology agents. In addition, the data from the report indicate that plans increasingly rely on pharmacy benefit managers (PBMs) to administer PA for specialty drugs under both the pharmacy and medical benefits.

As we have reported, much of the specialty spend occurs under the medical benefit. Nearly 64% of payers say that their top priority for drugs falling in this category is obtaining new drug code (NDC) level claims data. The payers noted that directing patients to a preferred site of care and repricing claims according to fee schedule were also among their top priorities.

Nearly half (45%) of payers block or plan to block coverage of non-preferred drugs with coupons, and 31% plan to block the use of coupons for these drugs entirely. Nearly 69% of plans grandfather coverage of nonpreferred drugs or say they plan to do so over the next year.

Site-of-care initiatives seem to be a big influencer in terms of provider reimbursement; 61% of plans currently implement or intend to implement a preferred infusion network. Among the most popular reimbursement strategies that payers currently use or plan to implement are creating a preferred infusion network and leveraging 340B pricing with hospitals. 340B strategies may be increasingly important in the coming years, as 241 community oncology clinics have closed and 392 practices have been acquired by a hospital in the past 4.5 years, according to data from The Community Oncology Alliance highlighted in the digest.

In the management of oncology medications specifically, payers have embraced the use of mandatory specialty pharmacy providers, increased their focus on end-of-life programs, and focused more tightly on the use of drugs with companion diagnostics.

Specialty Pharmacy Providers (SPPs)

So, how are specialty pharmacy providers doing? According to the digest, nearly 50% of plans do not provide a therapy management plan for oncology, and nearly 66% of plans are not satisfied with the efforts these providers are making to boost adherence. Fewer than 44% of plans have been granted performance guarantees from their SPP for adherence, patient outcomes, and medical or pharmacy cost savings.

Health plans asserted that the most important service provided by SPPs is ensuring dose accuracy. Tracking patient intervention outcomes was identified as being of least value to payers. Just 22% of medical benefit providers mandate use of an SPP, while nearly 66% of commercial plans mandate their use for self-administered specialty drugs.

These data indicate that plans expect specialty pharmacies to do more. The perceived value of the services specialty pharmacies provide may be lower than it should be, and this presents an opportunity for specialty pharmacies to improve. “The increasing need for detailed information on patient adherence, quality of care, and outcomes measurement is changing the role of specialty pharmacies,” noted the report. “Payers will continue to look to specialty pharmacies to provide comprehensive data on the real-world effectiveness of specialty pharmaceuticals and to demonstrate their ability to influence patient outcomes.”