The cost of specialty drugs is rapidly growing, becoming one of the largest pain points for employers. Over the past 10 years, specialty drugs have changed dramatically, and employers need to consider how they will manage the rising cost and demand of these drugs. In 2021, specialty drug spending per member per year increased by 14.2 percent compared to 2020.
Specialty drugs present a massive risk to employers, especially to self-insured employers. Workers don’t realize how their medical choices impact their employers and how their choices translate to their benefits costs. Let’s explore some of the challenges of specialty drug costs and how to address them.
Challenges Surrounding the Cost of Specialty Drugs
Specialty drugs are often the most effective (and sometimes the only) treatment for certain conditions, but they also come with a higher lifetime cost. For example, therapies for rare conditions can transform how they are treated, but these therapies also drive the increased specialty drug trend. Most of this increase is seen with dermatological drugs, anti-inflammatory drugs, and cancer therapies.
Consider Novartis’ therapy Gleevec (imatinib). This therapy is used to treat patients with a rare form of cancer called chronic myelogenous leukemia (CML), which affects specific types of white blood cells. The drug was revolutionary because it established a new class of drugs called targeted therapies that destroy cancer cells while not affecting healthy cells. Although this medication changes patients' lives, it’s also expensive and contributes to the tension between covering life-altering drugs and increasing specialty drug spending.
The Midwest Business Group on Health (MBGH) conducted annual research on employer health benefits priorities. When asked about top threats to employer-provided benefits, an alarming 94 percent of respondents cited high-cost pharmacy claims, whereas 89 percent of respondents cited specialty drug spending.
As the cost of specialty drugs continues to rise, some employers won’t be able to cover these expensive therapies. Measures need to be taken to address specialty drug costs and additional pain points, such as medical and drug cost transparency.
Strategies to Reduce the Cost of Specialty Drugs
Specialty drugs are considerably more expensive than traditional drugs. They often cost $2,000 a month per patient, but some specialty drugs are even more expensive, ringing in at $6,800 a month or even $100,000 a year. However, these drugs are often the only treatment for a condition, so they’re required for patients to live as fully as possible.
Controlling specialty drug costs is a top priority for employers. The MBGH survey found that 64 percent of respondents want to focus on addressing specialty drug costs, and 74 percent want to manage specialty drugs through payment reform. Additionally, 72 percent of respondents want to steer employees to lower-cost drugs.
To guide employees toward lower-cost options, it’s essential to invest in tools and strategies that empower employees while decreasing pharmacy spend.
Evaluate Wasteful Medications
Wasteful medications often combine two ingredients into one drug when the individual ingredients are cheaper, thus increasing the cost of the drug. Wasteful medications also include prescription drugs when an over-the-counter alternative is available, and brand-name, high-cost prescription drugs when low-cost generics are available.
Wasteful medications are often included within a drug formulary because plan sponsors think employees will be disappointed if a specific prescribed drug isn’t in the formulary. However, these drugs are often prescribed because physicians don’t realize they come at a high cost.
By determining which drugs are wasteful and adhering to a formulary that focuses on affordable yet effective medications, pharmacy spend can be reduced, thus benefiting employers and workers.
Emphasize Early Testing and Preventative Care
Consider that specialty drugs account for 10 percent of prescriptions but 80 percent of pharmacy costs. Focusing on preventative care can help reduce the amount spent on specialty drugs.
For example, employers can emphasize early cancer detection screenings and testing for other chronic diseases. Investing in wellness programs and emphasizing preventative care is essential to helping workers stay healthy and happy.
Invest in a Pharmacy Savings Solution
One of the best strategies to reduce the cost of specialty drugs is to invest in a pharmacy savings solution like Bluebook Rx™ which includes guidance from a licensed clinical staff and concierge support for members and providers to ensure members have access to cost-effective medications.
Bluebook Rx also analyzes utilization patterns and engages members with pharmacy savings opportunities tailored to them. The result is high member satisfaction, lower costs, and medical and pharmacy navigation—all in one simple platform.
Ready to Improve Pharmacy Spending?
The cost of specialty drugs is a common pain point for employers and workers, but Healthcare Bluebook has resources that can help. Get in touch today to find out how to decrease pharmacy spend with our savings solution, Bluebook Rx.