Health

Health Plans Brace For Specialty Drugs Eclipsing 50% Of Prescription Spending

As more expensive specialty drugs from Alzheimer treatments to new drugs for cancer hit the US market, those handling prescriptions and their claims are bracing for an even larger focus on these costly medicines.

Health plans and pharmacy benefit managers (PBMs) that manage drug costs speaking at this year’s Asembia Specialty Pharmacy Summit in Las Vegas say specialty drugs now account for 50% or greater of the total prescription spending they manage. In some cases, employer clients are seeing specialty costs account for 60% or even greater of their total drug spending.

“It really is frightening for our clients,” Lucille Accetta, senior vice president of pharmacy benefit management and specialty product development at CVS Health told hundreds of attendees at the Asembia event, which runs through Thursday and drew more than 5,000 people from the healthcare industry . “We have to be the best purchaser for our clients.”

Executives from CVS, which owns the large Caremark PBM and Aetna, the nation’s third largest health insurer, as well as UnitedHealth Group’s OptumRx PBM, the health insurer Humana and drugstore giant Walgreens discussed the increasing role specialty pharmacy plays in overall drug costs at the Asembia meeting, which featured the pharmacy executives from these companies Tuesday morning.

Long gone are the days when health plans and PBMs had to worry about the launch of a new cholesterol pill or prescription antidepressant that would cost $4 each and be taken by millions of Americans. These days, it’s specialty drugs derived from biotechnology that may only be 1% to 2% of the claims health plans process for an employer or government client but are becoming a more dominant part of what they have to administer and manage.

Last year, employer clients of the big benefit consultancy Mercer on average “experienced specialty spend around 48% of total pharmacy costs based on 2021 calendar year data,” a company spokesman said.

To reign in the costs of prescription drugs while maintaining access to life-saving treatments, health plans and pharmacies say they are more closely monitoring patients as soon as they are on the drug, said Rina Shah, group vice president of pharmacy operations and services at Walgreens.

Meanwhile, health plans say they are working closely with their clients, including employers to carve out options for them to cover not only ongoing prescription needs but gene therapies that will be increasingly prescribed in the future, said Michael Einodshofer, senior vice president and chief pharmacy officer at OptumRx.

Health plan executives say they are increasingly examining the “total health of the patient,” said Humana senior vice president of specialty pharmacy Natalie Bedford. That means the “physical, mental and social” aspects of the patient’s wellbeing, these executives said.

Other smaller and independent PBMs and health plans, too, are launching new products and platforms they hope will help their government, commercial and employer clients better manage the rising costs of prescription drugs.

Take Covers Health, an independent PBM that manages more than $5 billion in drug costs annually for more than four million Americans has executives at this week’s Asembia meeting talking up its efforts to better manage specialty pharmacy costs.

The company’s Assura solution launched earlier this year “guarantees the net cost of drugs, including specialty medications, by offering an annual fixed per script cost for a health plan’s entire population,” Abarca said in announcing the new pricing solution earlier this year. The guarantee, Abarca CEO Jason Borschow says, is adjusted each year based on drug benefit coverage changes.

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