PBM’s specialty Rx costs soar despite lower trend

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A leading pharmacy benefit manager has shaved its drug trend — the combination of a drug's cost and its usage — to its lowest point in four years, but specialty drug costs are still hard to swallow for employers and their advisers.

CVS Caremark’s overall drug pricing and usage trend fell to an average of 3.2% last year from 5.0% in 2015 with the help of price protection, return of more than 90% of overall rebates, use of generics and targeted approaches. Other bright spots include 38% of commercial customers actually achieving a negative trend and out-of-pocket costs for members decreasing 3% during this period.

However, the specialty drug category grew to nearly 36% of overall gross spend on prescription drugs and is expected to reach 55% by 2020. Apart from anti-inflammatory medications for rheumatoid arthritis and psoriasis, other major cost-drivers included antineoplastics and adjunctive therapies used to treat cancer, as well as psychotherapeutic and neurological agents, including multiple sclerosis therapies.

“We know that specialty drugs costs are an area of great concern for employers,” says Troyen Brennan, M.D., executive VP and chief medical officer at CVS Health. He predicts such growth “will likely outpace that of traditional pharmaceuticals for the next several years as new products come to market and the population ages.”

See also: “Generic drugs beat explosive price trends in health plans

Mindful of these challenges, various techniques are being employed to manage trend and improve outcomes. Brennan says they include an integrated specialty management approach that manages spend at the therapeutic class level, regardless of benefit, and evaluation of prescriptions in the context of a patient’s complete disease state vs. an individual event or drug.

“Biosimilars also represent a tremendous savings opportunity in specialty management with more FDA approvals expected in the coming years,” he says. CVS Health led the market with inclusion of biosimilars on the 2017 formulary, which included the biosimilar Zarxio replacing Neupogen.

Large commercial payers and PBMs are starting to recognize that specialty drug costs depend on the site of care, according to Rujul Desai, a VP at Avalere Health, an Inovalon Company. For example, a hospital’s outpatient department typically costs more than a physician’s office, which also is more expensive than home infusion. His research shows that significant savings are possible when closer scrutiny of where these scripts are administered is applied to areas such as rheumatoid arthritis.

“One of the ways in which site-of-care optimization is achieved is through a concept called specialty pharmacy white bagging,” says Desai, with products being procured from specialty pharmacies that would submit claims. “That drug is sent to the physician office the day of the injection or infusion, but the physician is not going to buy and bill for it, and therefore, it results in a lower cost.”

But employers and their advisers also must challenge the notion that dispensing products at a PBM-owned specialty pharmacy will always result in the lowest possible cost, according to Desai, whose expertise is in the specialty drug category. He’d like to see “more network inclusion of maybe two or three really strong specialty pharmacies that we force to bid against each other across various disease states.”

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