Expanding the Focus of Value-Based Benefit Design: Specialty Pharmacy

The American Journal of Pharmacy Benefits, April 2010, Volume 2, Issue 2

Can value-based benefit design be used in specialty pharmacy to address costs and align incentives between patients and payers?

Hundreds of articles have discussed how healthcare consumer out-of-pocket costs affect the utilization of medications. This is not to say that cost is the only or even the main driver of medication adherence. My research over the past 7 years in the area of medication adherence, as well as the research of many others, has shown that cost is one of the factors affecting adherence, but clearly not the only one.

The past few years have brought increasing focus on the use of value-based benefits. Although value-based benefits encompass more than pharmacy, pharmacy often is the first area in which a payer will utilize this type of benefit design. It also is the area for which there are the most published studies.

Organizations such as Pitney Bowes, Marriott, and the University of Michigan have used this type of benefit model for a number of medications and classes of medications. Each organization has created a unique benefit; however, all these benefits have one thing in common: decreasing out-of-pocket costs for the consumer for a subset of medications that have been defined as having high value. For each of these organizations (as well as hundreds more), it has been shown that appropriate utilization can be improved if the benefit is set up appropriately, communicated well, and supported with additional education and support programs.

I could write at length on what constitutes a good pharmacy-focused, value-based benefit design, but I will keep that for another time. What I do want to discuss is the new frontier for pharmacy-focused, value-based benefit design: specialty medications. In the last issue of The American Journal of Pharmacy Benefits, I wrote about the sometimes significant out-of-pocket costs burdening the user of specialty drugs. Without a monthly cap on out-of-pocket costs, healthcare consumers could be facing bills in the thousands of dollars each month. Often, such costs would put a drug out of reach for the consumer.

A recent question is whether value-based benefit design can be used in specialty pharmacy to address costs and align incentives between patients and payers. It is unlikely that we would see zero copayments for these drugs, as might be possible for small-molecule medications, but decreased copayments or coinsurance might be feasible. The plan sponsor could decide whether this out-of-pocket cost reduction would be given to all consumers utilizing the drugs, only a subset such as high-risk utilizers, or in conjunction with other activities such as continued adherence to medications and other treatment requirements. All of these models have been utilized by plan sponsors for small-molecule medications.

Regardless of how the design is created, I challenge all of us to look at ways in which we can create an environment where healthcare consumers can get appropriate medications without having to declare bankruptcy, while still not putting all of the burden on the payer. I welcome the submission of articles on this subject.