Payers and manufacturers must ensure patients are getting the most value from their therapy.
Health care reform initiatives and the rising trend of specialty medications continue to be the focus of many across the specialty pharmacy industry. As these factors collide, stakeholders struggle to find ways to balance increased access with cost containment measures and demands for accountability.
Spending on specialty medications amounted to $121 billion in 2015, up 15% from the previous year. Spending on specialty drugs continue to rise at a rate higher than spending on traditional drugs.
Innovation and increased utilization are the main drivers of the high trend in specialty spending.1 The services provided by specialty pharmacies are leveraged to aid in the management of this growing class of medications.
The Affordable Care Act (ACA) has made health care accessible to millions, but the entry of the formerly uninsured population has led to increased utilization, and greater demand to stretch the health care dollar. Payers and manufacturers have been called upon to ensure patients are getting the most value from their therapy.
The traditional formula that equates value to quality over cost must now be reformulated to consider efficacy and affordability. Unfortunately, management strategies aimed at controlling cost and utilization create significant barriers to the accountability, affordability, and accessibility that are the cornerstones of the ACA.
Although there is no clear definition, the term specialty is typically applied to high-cost medications that treat rare, complex, or difficult-to-manage diseases. These drugs necessitate special drug handling and storage, require ongoing clinical monitoring, and demand specific disease state knowledge and reimbursement expertise. Historically, regimens to treat complex disease states were comprised of injectable or intravenously administered medications, dispensed and administered in physicians’ offices or hospitals, and covered through major medical insurance.
However, due to their high price tag, specialty items have caused a shift in the structure of pharmaceutical reimbursement, delivery, and distribution. Today, many specialty products are billed through the pharmacy benefit.2
This shift is attributable to innovations in biotechnology, as well as to the effort of payers to grasp better control over utilization. Advances in therapy have made medications more convenient for patients by offering oral or injectable medications that can be self-administered in the comfort of a patient’s home.
This transition is moving distribution out of the physician-controlled setting and into pharmacies. The onus for irresponsible utilization from accountability over administration has shifted from the provider to the patient.
This loss of control creates an obstacle in achieving optimal therapeutic outcomes, which is of concern for stakeholders challenged with more accountability in the wake of the ACA. As the payer landscape transitions from the traditional fee-for-service model to a value-based payment structure, this issue increases in importance.
Due to their unprecedented price tags, benefit design modifications, including utilization management strategies and cost sharing, are shifting the burden of access and affordability over to the patient.3 Movement to a multiple tier, coinsurance coverage model caused an increase in patient cost exposure.
Between 2006 and 2009, the most common coinsurance rate for biologic agents was 33%.3 With out-of-pocket costs that can add up to $66,000 a year for a patient on multiple medications4, these strategies make treatment prohibitively expensive for many patients.
Additionally, many payers have implemented strict utilization criteria, and have turned to excluding drugs from their formularies. Such cost-containment strategies prohibit the accessibility created and championed by the ACA.
The sheer volume of high-cost medications for complex disease states has made specialty pharmacy a major force in health care delivery; however, this role is becoming increasingly important in the cost, access, and treatment outcomes for patients managing complex diseases.
Patients and physicians rely on the services provided by their specialty pharmacy partners to help overcome the barriers to access, accountability, and affordability.
Patients and physicians must rely on specialty pharmacies, as payers and manufacturers shift access to restricted drug distribution channels. Although these restrictions require patients to obtain pharmaceutical care from numerous entities, specialty pharmacies are working to streamline the process.
Proactive outreach, including phone contact to onboard the patient, helps to explain the services provided from the specialty pharmacy, and can set the stage for what a patient can expect in terms of delivery and follow-up. During these initial calls, the specialty pharmacy is able to create a line of open communication with the patient and caregivers to overcome the fragmentation in care.
Unlike retail pharmacies, specialty pharmacies have the inventory on-hand, and the distribution mechanisms in place, to prevent treatment interruptions. They also have disease state expertise to help with responsible prescribing and utilization.
Specialty pharmacies are an important factor in the clinical outcomes of the nation’s most expensive patient population. Patients and physicians burdened with managing complex diseases rely on the services of specialty pharmacies to improve the value of care.
Specialty pharmacies provide clinical disease management through myriad services. Patient education on drug administration and handling, proactive monitoring of adverse events, and patient adherence measures work in concert to ensure effective utilization.
Use of restricted specialty networks allow stakeholders to count on less variability in patient care. Data management created and fulfilled by specialty pharmacies is also leveraged by physicians, payers, and manufacturers to track clinical outcomes and interventions.
Specialty pharmacies have the experience and expertise to help patients and caregivers navigate the complex reimbursement processes surrounding specialty products. The goals are to simplify the process for patients, payers, and prescribers, and to ensure affordability is not a barrier to treatment.
Contracting with manufacturers for discounted prices, and aiding physicians in the prior authorization process, are two examples of cost-management offerings provided by specialty pharmacies. These entities also work to cap the out-of-pocket expenditures of patients.
The trend in specialty pharmacy is to take an active approach in securing financial assistance for patients whose out-of-pocket responsibility would create a barrier to treatment. Specialty pharmacies employ all services to actively scan the industry for patient assistance through patient access networks or manufacturer assistance programs for qualified patients.
Despite the value-added services provided by specialty pharmacies, stakeholders remain concerned over the fragmentation of care. Collaboration with the patient’s multidisciplinary team is essential to ensure proper utilization of these expensive, but life-changing therapies.
With a robust biotechnology pipeline, the specialty pharmacy sector is set to remain a growing and dynamic component of the market. Innovative strategies will be needed to continue to ensure appropriate management.
Heather Brand earned her B.A. in Chemistry and PharmD from the University at Buffalo, SUNY. She worked for an oncology based pharmacy for six years prior to transitioning to a consultant role for a benefits management firm. She is currently enrolled in the Masters of Science in Pharmacy Business Administration (MSPBA) program at the University of Pittsburgh, a 12-month, executive-style graduate education program designed for working professionals striving to be tomorrow’s leaders in the business of medicines.