With the ongoing development of new pharmaceuticals, as well as more drugs being approved for new indications, the robust specialty drug market continues to grow year after year. And, we have all seen the statistics:
While this continues to be a challenge for stakeholders across the health care spectrum, it is especially difficult for health plans and the members they serve. As specialty drug spending increases, health plans struggle to keep costs low and outcomes high.
The approach to this issue is not straightforward, however. All specialty drugs are not the same, and can in fact, be grouped into one of three distinct categories allowing health plans to approach cost management strategies in a customized, targeted manner.
1. Orphan Drugs – Specialty drugs generally classified to treat rare conditions affecting less than 200,000 people. These brands enjoy seven years of exclusivity on the market with no competition often meaning extremely high costs.
Example: In the U.S. market Rituxan by Genetech and Biogen Pharmaceuticals is an antibody therapy that was originally approved for the treatment of B-cell non-Hodgkin’s lymphoma (NHL) that is CD20 positive. Rituxan is perennially one of the top drug expenditures for the Medicare program2 with costs averaging $45,771 per patient per year.3
2. Specialty Drug Therapeutic Groups – Specialty drugs used to treat both episodic and chronic conditions where several other specialty drug options may be available for treatment.
Example: Copaxone by Teva Pharmaceuticals is an injectable medicine used for the treatment of multiple sclerosis, and despite there being about 10 other specialty drugs approved to treat multiple sclerosis, including a generic, Copaxone accounts for 30% of prescriptions for this indication.3
For health plans, it might be possible to apply more traditional pharmacy management techniques (e.g. tiered formularies) in order to have a preferred agent(s), but this is likely limited by the scope of the drugs’ indications.
3. Mixed Drug Therapeutic Groups - Specialty drugs used to treat chronic conditions where other specialty and traditional therapies may be available for treatment.
Example: In the U.S. market, Enbrel by Amgen Pharmaceuticals is a powder or injectable biologic used to treat rheumatoid arthritis and other chronic autoimmune diseases at an average price tag of $4,000 a month per patient.4 There are many alternative biologic specialty treatments to Enbrel, including Cimzia, Stelara and Humira to name a few, but also traditional treatments like Methotrexate – often used as part of a step therapy strategy.
Health Plans can use traditional management techniques like step therapy (“fail-first”) and preferred agents to help control cost and ensure proper utilization.
HDMS can take a health plan’s raw data and combine it with industry knowledge to easily and quickly provide the insights needed to approach specialty drug costs. With the ability to integrate pharmacy claims data with medical claims data, a clear picture begins to emerge.
Using HDMS’s pre-defined, out-of-the-box methodology and specialty drug reports, health plans can quickly get the insights they need to take action. And alternately, HDMS offers flexible, customized reporting options to health plans based on their individual needs.
Example of HDMS pharmacy reporting
Health plans can use these provided trends and insights to take action to resolve their biggest challenges.
For more information on this topic or to schedule a 15-minute demo to see how we can help you manage specialty drug costs, please email email@example.com.
1Express Scripts 2016 Drug Trend Report