The Challenge Of Rising Specialty Drug Costs

Last month, we covered the rising cost of specialty drugs and the impact it is having on employers. This month, a WEA Trust staff pharmacist weighs in on what employers and employees can do.

During Ted Collins' 20 years in benefits management, first as a researcher at the University of Wisconsin and now as a consultant for WEA Trust, he has seen dramatic changes in the healthcare industry.

So when it comes to what he calls the "unsettling" development of runaway costs of specialty drugs, Collins knows there are no easy solutions. "Everybody in the business has the same dilemma," he said. "If there was a magic bullet to control costs, we'd all have jumped on it right away."

While the costs are challenging, Collins said these four areas can help reign in costs:

Site-of-management care. This is the number one area where costs can be curtailed, according to Collins. The priority is to have specialty drugs administered in the least expensive place, and that often means at home. While that is impractical for chemotherapy or a drug that requires a transfusion, if it's a drug that needs to be taken frequently and is predictable, it's more cost-effective to train the patient to take it himself. Collins pointed to the example of diabetics taking insulin.

"If there's a drug that can be self-administered, it's much less expensive to go to the pharmacy, get it, and self-administer, rather than go to the doctor's office," Collins said. "The most expensive place to get these drugs is if they happen to be given in the outpatient setting of a hospital."

Reimbursement management. In Collins' experience, rebates for specialty drugs are few and far between. But he recommends that plan managers be active and aggressive shoppers to find the supplier that maximizes patient convenience and affordability. "That's something we're constantly looking at: how do we maximize the best deal and the best service we can get," Collins said.

Plan-design management. For many plan sponsors, cost-sharing arrangements aren't coordinated across pharmacy and medical benefits. As patients search around to reduce their out-of-pocket costs, it can create a disincentive for them to seek cost-effective options. This will become more important as more specialty therapies are offered under both benefits.

Clinical management. It's crucial to make sure specialty drugs are being used appropriately. Off-label use, failure to try first-line treatments and use against medically accepted guidelines can needlessly raise costs. The magic bullet to control specialty costs, if one ever exists, would be competition from generics, often called biosimilars for specialty drugs. But those don't yet exist as alternatives to specialty drugs, and Collins said it's possible they never will.

"The old tools, at this point, don't work very well," Collins said. "It's a matter of using the tools we have, which are much less effective, the best we can, and hope that at some point we will see competition."

Tags

Pharmacy Drugs Prescription-Drugs Specialty-Drugs


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