Buck Bond Group

How to manage pharmacy benefits plans Part 4: Specialty drugs, the new major cost driver

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Pharmacy benefits plans are increasingly under cost pressures from biotechnological drugs – new specialty drugs for the treatment of chronic diseases – that in the next 3 years could account for almost half of an employer’s annual health care plan costs. Part 4 of this series looks at strategies to manage these costs.

The emergence of specialty (biotechnology) drugs, targeted to treat a range of cancers, as well as common chronic diseases, including diabetes, neurological conditions, rheumatoid arthritis and other autoimmune disorders, multiple sclerosis and cardiovascular disease, represents a major cost driver of pharmacy benefits plans.

These drugs currently average more than $2,000 per 30-day supply – with some exceeding $100,000 a year. Estimates from Medco Health Solutions show that by 2015 specialty drugs could represent 47 percent of annual employer drug costs provided through the medical and pharmacy plans combined.

Clearly, specialty drugs will be a major cost driver for employer plans going forward. Buck’s “2011 Prescription Drug Survey Report” shows that 33% of respondents replied that they do not know the cost of specialty drugs in their plans and another 25% thought their specialty drug costs represented less than 5% of their pharmacy plan costs. If employers don’t have a comprehensive strategy to manage this, their pharmacy plans will soon be unaffordable.

Strategic Decision Point

Certainly, driving up member cost share for these drugs is counterproductive. If patients stop taking specialty drugs, their condition will likely worsen and will require expensive hospitalizations which, in turn, will drive up employer medical plan costs. The key to managing specialty drug costs is to implement a strategy that includes proactive patient management to help members manage their conditions and drug side effects, and ensure appropriate use of these drugs for the right condition at the right time and at the right dose.

Two key elements of a specialty drug strategy to consider are:

  • Carve out self-injectable and orally administered specialty drugs from both the medical and pharmacy plans for dispensing through a specialty pharmacy
  • Implement proactive clinical management programs through the specialty pharmacy


Next: Conclusion – The marketplace is both a challenge, and an opportunity for savings