Below are a number of cost-control approaches available today that are not working very well:
1. Insurance Carrier Approach
Insurance carriers typically see the bigger picture and have the intrinsic motivation to control pharmaceutical costs. Carriers are in a unique position to engage all four constituents in the solution: healthcare providers, pharmaceutical companies, employers and plan participants. One carrier’s approach is to focus on affordability, health improvement, and efficient and effective delivery and monitoring systems. This is accomplished through:
Gaining insights and sharing best practices and treatment regime from all healthcare professionals
Proactively engaging the current and future patient community with education
Coordinating and improving the proper management of care delivery
Aligning incentives for all participants
Issues to Consider
Many employees are enrolled in benefit plan designs that offer them freedom of choice when it comes to treatment decisions. The carrier programs introduce tighter controls that will impact these employees, their spouse and their dependents.
Is this strategy in alignment with other employee interactions?
Is it consistent with your company culture?
Additionally, are the education and communication strategies in place to support a successful role out?
2. Pharmacy Benefit Management Approach
PBMs generally make money through service fees charged for processing prescriptions, operating mail-order pharmacies and negotiating with pharmacies and drug-makers. Their contracts can include incentives for cutting costs. Their approach to managing specialty drug costs focus on:
Utilization management programs
Network and formulary management
Oversight of office-based injectable prescribing
Policies to scrutinize billing
Issues to Consider
With nearly 50% of the total cost for specialty drugs embedded within the medical spend through hospital admissions and other out-patient treatment facilities, these programs will be limited by their reach.
How decisions are made and to what extent discounts are negotiated to determine which drugs end up where on the formulary lists and/or in specialty management programs
3. Specialty Pharmacy Approach
As stated earlier, the larger retail pharmacy chains have also entered the market with integrated specialty drug programs. One such program focuses on increasing access and improving outcomes through integrated utilization and clinical management programs to maximize adherence and minimize costs. The multichannel platform includes:
Central fulfillment with a network of retail pharmacies
Clinical integration with health systems pharmacies
Home and alternate treatment site infusion services
Access to limited distribution drugs
Issues to Consider
These programs will also be limited by their reach.
How is price negotiation with drug manufacturers handled by the pharmacy?
Is it direct or through a third party?
Is there adequate education to guide plan participants to the most cost-effective drug?
Are there proper incentives built into the system?
4. A Prescription to Contain Specialty Drug Costs
Here are some steps to take and strategies to consider as you decide on your course of action:
Develop your one- to three-year overall benefit strategies, including alignment with the realities of specialty drugs?
Know and understand your drug costs, what factors are driving increases
Understand the solutions available to you, through the carrier, PBM or a retail specialty channel
Introduce an effective education and communication strategy to support your prescription drug initiatives.
Most importantly, seek professional advice when developing a prescription drug program. A qualified group employee benefits professional should be able to guide you through this process.