Five ways to contain the specialty drug spend

Unlike past years, when utilization management and generic utilization drove cost savings, specialty medications require an array of management techniques-both on the pharmacy benefit and the medical benefit, according to a recent presentation at the Academy of Managed Care Pharmacy Nexus 2015.

“These include high-touch member interactions, education, clinical optimization, channel management, and traditional techniques like pre-authorization,” says Alex Dong, PharmD of OmedaRx.

OmedaRx issues a pipeline watch report to help employers understand new medications in development and existing medications that are moving to generic availability.

Related:Top ways to tap value from specialty drugs for chronic care

“[Care management techniques] also include new methods such as site of care optimization, a program being pioneered by only a few health plans and PBMs in the country, one of which is OmedaRx,” Dong says.

Over the next five years, specialty drug spend will grow to account for 50% of total drug spend. No other component of healthcare spending is projected to grow as quickly as specialty medication cost, according to a report by Artemetrix.

“In addition, specialty medications are delivered to patients in an array of settings, which include specialty pharmacies, home infusion, alternate treatment facilities and physicians’ offices,” he says. “Patient experience and cost vary among each setting. Because some of these drugs may improve patient outcomes but some may come with safety concerns, it is imperative that health plans have a trusted source to perform evidence-based-medicine [EBM] reviews for each drug and provide guidance on their formulary.”

According to Dong, most healthcare executives are aware of blockbuster treatments for hepatitis C (Olysio, Sovaldi, Harvoni, and Viekira Pak).

“However, the pipeline is full of similar blockbuster drugs, which many executives might not be fully aware of yet,” he says. “New treatments for cholesterol, cancer, muscular dystrophy, cystic fibrosis, and other complex diseases are set for approval in the next 6 to 12 months and will account for significant increases in specialty spending.”

NEXT: Five recommendations for containing specialty drug spend

Dong has five specific recommendations for containing the specialty drug spend:

• Invest in clinical evidence-based drug review competency.

• Mitigate runaway spend by reducing waste and pricing inefficiencies.

• Develop a comprehensive management strategy that addresses total cost of care across pharmacy and medical benefits.

• Implement robust pipeline management and trend forecasting.

• Manage specialty pharmacy channels and contracts.

Regardless of management strategy, the future holds dramatic increases in cost, but the cost will not be spread across large populations-it will be concentrated among the small number of patients with complex, rare diseases, according to Dong.

Related: Explosion of specialty drugs challenges U.S. healthcare market

“Americans can expect dramatic increases in healthcare costs as a result of these trends. We should focus on evidence-based strategies to ensure these specialized medications are only used when they are likely to deliver optimal health outcomes to patients. There is hope that biosimilars may provide some relief in specialty medication spend.”

However, it will take a while to sort out clinical interchangeability and market dynamics, he says. “We may see more creative contracting with manufacturers that are value based as opposed to volume based.”